John Russell Young to Isaac F. Shepard, June 17, 1884

Mr. Young to Mr. Shepard.

Sir: I have had the honor to receive your dispatch No. 95. The subject to which it refers will have careful consideration.

I may say, however, that I do not share your opinion that we can ignore the fact, if such a fact is known, that American merchants are acting for Chinese principals and are not themselves the bona fide owners of the merchandise covered and protected by transit passes.

While it is true, as you say, that the tsung-li yamên, in its circular to Chinese ministers abroad, did recognize the fact that transit certificates “cover goods from a treaty port to a place named in the. certificate, exempting them from all taxes en route,” it is also true that the circular referred to maintains with equal plainness that under the treaties such certificates can only be used legitimately by foreigners to cover and protect foreign-owned merchandise.

This interpretation of the treaties has always been stoutly maintained by China, and, so far as I am-aware, has never been disputed by any foreign Government. A notable case may be found in the files of your own office, being that in which Mr. A. Jenkins claimed damages against the Chinese Government for the detention of goods under transit pass in 1874–‘75, and in which this legation declined to press his claim for damages, because the burden of evidence went to show that he was not the owner of the goods in question, but was acting for Chinese principals.

I shall have occasion to address you further upon this important question at an early moment.

I am, &c.,