CHINESE TRADE PARALYSED.
Japan's Firm Hand. Taxation Treaties Torn Up. SHANGHAI .Tnlv 15.
The effect of the Japanese policing of the Tsingtao to the Tsinan railway and their establishment of a neutral 2011c at Tsingtao, is most marked. The confl
uence ot me residents nas Deen restored and the tension relaxed. Officials on vacation are arriving at the popular re »ort in hundreds daily from Shanghai, Pekin, and other heat-stricken cities. Japanese troops con'!''' steadily to pour toward Tsingtao. The era--* number is difficult to estimate as many of the sol diers are disguised as civilians. The transport ? Hongkong Mam has landed 2,000 soldiers from Manchuria. Northerners continue to claim victories in Northern Shantung, but not of a de cisive nature. The Southerners are di verting considerable men from Shantunq towards Hankoir, and the remainder are Tetreating without fighting. The posi tions have scarcely changed. Feeling is high as the outcome of the Nationalist taxation proposals and every thing points to the situation creating a "show down" of the Powers. The Nationalists' activities are based on an alleged violation of treaty rights affecting all the Powers. TOBACCO TAX RESISTED. The trade crash at Hankow also threatens Shanghai unless immediate and drastic action is taken by the Powers. The first efforts of Nationalist officials to collect the new 50 per cent, tax on tobacco to-day, in contravention of the treaties, were frustrated by the merchants who re- fused to pay. The officials took up posi- tions outside the customs releasing depots and refused deliveries except upon pay- ment of the new impost. Importers com- plained to their respective Chambers of Commerce and at a combined meeting it was decided to write to the senior Consul (United States) and to request the con- sular body to meet a deputation of mer- chants who are preparing a list of ques- tions to present to the consular body, and they declare that they are determined not to pay, explaining their action by stating that the Nationalists frankly admit that the increase is necessary to continue the campaign against the North. The mer- chants refuse to finance the Chinese mili- tary campaign and thus prolong the civil war, apart from the contention that the tax is illegal, according to the findings of recent tariff conference. The tobacco tax is but one instance of a wholesale imposition of taxes, amounting to an at- tempt to enforce tariff autonomy in order to raise military funds as quickly as pos sible at the expense of trade. Such a programme as carried out by the Hankow Government has reduced Hankow to a condition of industrial idleness and, para- lyzed the entire trade of Central China. INDUSTRIES CLOSING DOWN. The situation in Shanghai is such that the ITunicipal Council hn* found it neces Bary to publish a warning to Chinese residents in .the settlement against meeting the demands of the N^'--~ i;'ts for two months' *''':-* rent, which illustrates the extent of the activities of the Nationalist revenue collectors. t:--~ -;-T ??^tortion is practised despite the vigilance of the authorities. ''''? Nat?'T'l'-fc' aimnts oper ate secretly, and their victims are. afraid to report the matter. The head of the largest British-American tobacco company, which is they distributor of .. 'Capstan' brands, declared fiw--- thatrthe directors were considering closing down in view of the crippled state o£ business. Trade with the interior has been entirely sus pended, and there is little hope of its re covery. ' The local factories are curtail ing their outputs by 80 per cent., which, is typicnl 'p other firms. Unquestionably the submission of the Powers to the Nationalist tax programme will write 'finis' to foreign trade in China, Shang hri being the last stronghold.