893.512/872: Telegram
The Minister in China (MacMurray) to the Secretary of State
823. Department’s 373, November 8, 7 p.m.
- 1.
- Following telegrams from the American consul general at Canton:
“November 8, 6 p.m. In regard to Standard Oil Company lighters: Finance Department has decided to fine the company $26,000 Chinese currency and confiscate cargoes. Official notice not yet received but I am reliably informed following are given as reasons for fine.
- (1)
- No permit to import your cargo. As to this, manager assures me company has never obtained import permits for stamped cargo.
- (2)
- Shipping to port where there is no licensed warehouse. Manager says that there is nothing in oil regulations to prohibit this and that the company has consistently imported to such ports ever since oil tax regulations became effective.
- (3)
- Shipping to a place where there is no oil tank. Manager says that the company has an oil tank at Shiuhing where oil was destined but there is nothing in the regulations regarding this point and the company has been shipping regularly to various places regardless of the existence or nonexistence of tanks. In fact, bulk shipments accompanied by stamps have been made during the last year under convoy of Chinese warships.
- (4)
- Insufficient stamps to accompany bulk oil. Manager denies this charge and has handed me stamps for safekeeping which he says actually accompanied lighters when seized.
- (5)
- Stamps on containers not properly placed. Admits that the stamps were not placed over caps but insists that there is nothing in existing regulations requiring this. He does insist, however, that all tins examined actually bore stamps [which] regulations require. More to follow.”
“November 9, noon. My telegram of November 8, 6 p.m. Attention is invited to the fact that the lighters are still being held and that Finance Department has determined this case without contact with this consulate general and in spite of its protest [concerning the?] question of jurisdiction. Moreover, the charges on which fine is based are frivolous and in my opinion indicate unfriendly attitude and a determination on the part of local authorities absolutely to disregard existing treaty rights. If the authorities wished the company to change its method of importing under the practice of two years, originally approved by T. V. Soong,79 they could have and should have so informed the company in advance of the seizure and not resorted to present illegal and arbitrary procedure.
The Legation will be interested to know that this same Smuggling Prevention Bureau has just seized a cargo of feathers belonging to [Page 520] a Danish-British company and on board lighter flying Danish flag, alleging evidence of smuggling. According to the Danish consul, lighter is being held by armed Chinese guards in spite of the fact that he has exhibited letter from Maritime Customs showing that feathers were being handled in strict accordance with the special instructions of the Commissioner of Customs. Officials of the Smuggling Prevention Bureau say that Danish cargo must still be held because Maritime Customs are wrong.
In my opinion these cases conclusively show that Canton Government [is] intending to acquire jurisdiction of foreign vessels in local waters, no matter how unreasonable and arbitrary the pretext, and is using Smuggling Prevention Bureau for the purpose. This bureau evolved from late strikers’ organization and protests of these methods.
I shall telegraph further as soon as I am officially informed of Treasury’s decision, but must confess I am at my wit’s end how to effect release of Standard Oil Company lighters. If the company submits to fine in this instance there will be no end of cases of this sort. Perhaps the Legation may appeal to Mukden [Nanking?].”
“November 10, 1 p.m. My November 8, 6 p.m., and November 9, noon. Official notice has been received and is substantially as outlined in my November 8, 6 p.m.
I have filed formal protest on the ground that proceedings were illegal and in violation of existing treaty rights; that this decision contains, first, official notice of the grounds on which lighters were seized and that Standard Oil Company contributes no other way to answer the charges and submit evidence. I have also pointed out that I must report the case in detail to my Government and for possible appeal to the National[ist] Government at Nanking, and have warned local authorities not to dispose of lighters and cargoes pending final outcome.
I would advise that the Legation take up this case by telegraph with Nanking, insisting upon release of lighters and cargoes and perhaps suggesting that charges may be jointly investigated by representatives from the Finance Department and this consulate general.
Full report is being forwarded by mail.”
- [2.]
- In view of the fact that the action taken by the Finance Department directly jeopardizes the whole system of American business in South China and further in view of the fact that the so-called Prevention Bureau which would appear to be responsible for the action taken is apparently acting without any legal authority, I venture most respectfully to suggest that the Department reconsider the possibility of instructing the consul general to inform local authorities that the American company will under no circumstances submit to such illegal and high-handed a trick and that he be authorized simultaneously to request the American Naval authorities at Canton to despatch a gunboat to lie [alongside?] the lighters to show that their illegal seizure will not be tolerated.
- 3.
- I immediately propose to lodge with the Nationalist Government a strong protest which however I anticipate will be disregarded unless the Department sees its way to authorize the Naval support recommended above.