693.116/126
    The Minister in China (Johnson) to the Secretary of State

No. 2495                                PEIPING, January 31, 1934.
                                          [Received February 24.]
  SIR: I have the honor to refer to the Legation's despatch No. 2451,
January 5, 1934,22 upon the subject of the restrictions placed upon the
business of American oil companies by the Chinese authorities at
Canton, and to enclose a copy of despatch No. 245, January 12, 1934,
from the Consul General at Canton.2
  From the Consul General's despatch it appears that while a pretense
is being made that this taxation is being applied uniformly and with-
out discrimination, the provincial government is in fact granting to
Chinese refiners of kerosene produced locally from liquid fuel a rebate
of two-thirds of the tax under the guise of a subsidy to native industry.
  As this rebate appeared to the Legation to be in fact discriminative
tax treatment, the British Legation was consulted. As a result, we
have both instructed our consuls general at Canton to protest the
collection of this tax in the discriminative manner now evident. A
copy of my instruction to the American Consul General at Canton is
enclosed.22
  Although we did not believe that the Ministry of Foreign Affairs
was in a position to take any effective action in the premises, in order
that our views upon this latest move of the Canton authorities towards
the elimination of the oil companies from that region might be known
to the National Government, we have addressed similar notes of
protest to that Ministry. A copy of the Legation's note, together with
a copy of that sent by the British Legation is enclosed for the De-
partment's information.23
  Respectfully yours,                   NELSON TRUSLER JOHNSON


793.94/6625: Telegram
    The Secretary of State to the Minister in China (Johnson)

                               WASHINGTON, May 7, 1934-6 p. m.
  139. Please inform Canton in reference to its telegram of April 29,
noon,24 as follows:
  In your discretion, you are authorized, on some opportune occasion
when you are discussing with members of the Southwest Political
Council and other officials at Canton the oil discrimination matter or
2"Not printed.
3 Neither printed.
24 Ante, p. 147.



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