693.94244/229: Telegram
The Counselor of Embassy in China (Lockhart) to the Secretary of State
[Received May 11—9:10 a.m.]
133. My telegram No. 113, April 9, noon, and 131, May 4, 5 p.m.73 In a despatch dated May 7 the Consulate General at Tientsin reports74 that according to information compiled by the three foreign firms dealing in petroleum products in the Tientsin district 28,350 cases of kerosene and 3,505 cases of gasoline were landed in Hopei by the smugglers during April this being a considerable reduction in both items over the previous month.
The Commissioner of Customs states that he is quite confident that he will be able to put a stop to large scale smuggling in the near future. According to him a large proportion of the smuggled goods held by Japanese firms in Tientsin has been reported to the customs for duty payment and he believes that negotiation for the registration of smuggled goods held by Chinese firms will be satisfactorily completed within a few days; he is now seeking authorization to permit registration of smuggled goods on payment of only 30% of the duty, the balance to be paid before the goods are moved out of Tientsin or transferred to a purchaser. Authority has been received for customs officers to operate in the East Station yard at Tientsin but the implementing thereof is being postponed pending the clarification of the attitude of the Hopei–Chahar Political Council, its hesitation [Page 855] arising from the fact that it is subsidized to a certain extent by the Peining75 Railway, while the latter depended considerably for its revenue upon freight charges on smuggled goods brought from East Hopei. He states it seems probable that before the railway can be completely free to cooperate it will be necessary for some arrangement to be made whereby the East Hopei régime and the Political Council can obtain funds from other sources in substitution of the revenues now received from the railway.