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

No. 1248

PEIPING, November 5, 1931. [Received December 7.]

SIR: I have the honor to refer to the final paragraph of the Department's instruction No. 407, of February 26, 1931, in regard to the issuance of consular title deeds at Shanghai. In accordance with that instruction, the American Consul General at Shanghai was instructed to report the result of his negotiations with his interested colleagues in reference to the abolition of the present system under which title deeds are issued to non-beneficial owners of land located within the International Settlement and the French Concession at Shanghai. The Legation is now in receipt of Consul General Cunningham's despatch No. 7041, of October 23, 1931, a copy of which is enclosed,12 reporting that, after consultation with his colleagues, he finds that they are not disposed at the present time to effect any change in the procedure now obtaining in respect of the issuance of title deeds of the nature described. He adds that his colleagues "feel that the matter is closely concerned with the credit and finance situation in Shanghai and believe that no change should be made for the time being."

As pointed out by the Department in its instruction under reference, it is desirable that a uniform practice be established by all the powers concerned. In view, however, of the general political situation and of the present attitude of the Shanghai consular representatives of the other powers in respect of this matter, the Legation is of the opinion that the American Consul General at Shanghai should await a more favorable opportunity to seek to bring about the desired change in existing consular land office practice in regard to the issuance of title deeds to non-beneficial owners of land at Shanghai.

Respectfully yours,

For the Minister: C. VAN H. ENGERT First Secretary of Legation

"Not printed.


893.51 Contractual Obligations/18a: Telegram

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

WASHINGTON, January 3, 1931-6 p. m.

3. 1. From a study of the Minister's despatch of November 182 and your telegram No. 997, November 21, 11 a. m., it appears to the Department that it is the desire of the Chinese Government, before entering into the discussion of the amounts to be applied to individual accounts, to obtain the consent of the creditor nations to an agreedupon schedule of payments in settlement of China's "duly contracted obligations in arrears", the payments to be made exclusively from the customs, railway and salt revenues, to terminate in 30 years, and to be applied to all of China's outstanding contractual obligations.

2. The Department is at present engaged in classifying and listing all American claims against China of which it has record, to supplement the survey of outstanding claims transmitted with its instruction No. 1467 of February 3, 1930.* It is preparing also a list of obligations of a contractual nature, as requested in the Legation's telegram under reference. This work may take several weeks. Department would hesitate to make an estimate, for presentation to the Chinese Government, of the total amount of contractual obligations of record in the Department due American creditors until the latter have been given an opportunity to submit statements of the present amounts of their respective claims. Department desires, in this relation, to learn whether the Minister believes that it would be premature under present circumstances for the Department to request such statements from American organizations and individuals interested. Department has given in confidence to J. P. Morgan and Company and to the Continental Illinois Bank and Trust Company the text of the Chinese Government's memorandum but has not invited comments thereon.

3. Department does not see how it could give its consent to a proposal that annual payments be limited to sums to be derived from limited sources of revenue unless it were first given satisfactory evidence that the Chinese Government intended to give under that plan just and non-discriminatory consideration to the aggregate amount of the obligations owed by it to American creditors.

4. Therefore, if the Minister believes that a communication should be addressed to the Chinese Government in reference to the proposal

1 Continued from Foreign Relations, 1930, vol. II, pp. 580-608. 'Not printed.

. Foreign Relations, 1930, vol. I, p. 607.

'Ibid., p. 581.

made to him and certain of his colleagues on November 15,5 the Department desires that he inform the Chinese Government that the American Government desires to facilitate in every appropriate and feasible manner the adjustment of the foreign obligations of the Chinese Government but that the American Government would not be in a position to give its assent to the present tentative plan until it had been informed more fully in regard to the treatment which the Chinese Government expects thereunder to accord to the total outstanding obligations owed to American citizens and organizations.

5. The Minister's comments and suggestions would be welcomed, together with an indication of the attitude of other interested govern


6. The Department desires also to have the Minister's views as to whether the Chinese Government would be prepared, in addition to its proposal regarding contractual obligations, to propose an adjustment of pending American claims of all sorts, perhaps through the medium of a Sino-American claims commission.


893.51 Contractual Obligations/19: Telegram

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

PEIPING, January 9, 1931-6 p. m. [Received January 9-10:40 a. m.]

15. Your No. 3, January 3, 6 p. m. 1. My view is the same as that expressed in paragraph 1 of the Department's telegram although no details in regard to real plan of Chinese Minister of Finance are available as yet.

2. It is my understanding that Chinese Ministry of Finance desires that we present as complete a list of outstanding obligations of a contractual nature as possible with statements of sums due. Ministry of Finance has apparently worked out such statements for its own account but asks that we present our case first.

3. I have been able to learn little in regard to the attitude of other Governments on this matter. Those with whom I have talked have indicated that they sent home the memorandum of the Chinese Government and that in each case the Governments are preparing statements for submission to the Chinese Government with a view to taking the next step which will be to discover the actual nature of the proposal which the Chinese Government has in mind for the liquidation of un

"See telegram No. 997, November 21, 1930, from the Minister in China, ibid., p. 607.

secured and inadequately secured contractual obligations. I shall make inquiries and communicate such information as I am able to obtain later.

4. I consider that it would do no harm for me to address a communication along the lines indicated in paragraph 4 of the Department's telegram to Dr. Wang Chung-hui, the President of the Commission, sending a copy to the Minister for Foreign Affairs and I shall do this now.

5. I am not in a position at this moment to express an opinion on the matters included in paragraph 6 of the Department's telegram but I believe that Chinese Government would give consideration to this proposal and I shall take it up with the Foreign Office on my next visit to Nanking which I expect to make about the first week in February.


893.51 Contractual Obligations/21: Telegram

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

PEIPING, January 12, 1931--3 p. m. [Received January 12-8:55 a. m.]

17. Department's 9, January 10, 5 p. m. I consider that it would not be premature to request statements from American creditors. It is my understanding that until statements are prepared I can go no further with the Minister of Finance on this matter.


893.51 Contractual Obligations/22: Telegram

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

PEIPING, January 16, 1931-5 p. m. [Received January 16-9:10 a. m.]

27. Department's 3, January 3, 6 p. m. I have transmitted through the Foreign Office a letter addressed to Dr. Wang Chung-hui, Chairman of the Commission for the Reorganization of China's Domestic and Foreign Loans, stating the Department's attitude as outlined in paragraph 4 of the above-cited telegram.

'Not printed.


493.11/1553: Telegram

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

NANKING, March 7, 1931-9 p. m. [Received March 8-1:30 p. m.]

Department's written instruction number 1467, February 3, 1930.7 I discussed informally with Minister for Foreign Affairs this morning possibility of negotiation of an agreement for the Claims Commission. Doctor Wang's first reaction was that Chinese Government would object on the ground that such a commission would interfere with work of the courts but admitted that question appeared novel to him and that he would like to study it.

I am therefore giving him for study without commitment on either side copy of draft of protocol enclosed with the Department's instruction.


493.11 Changsha/17

Memorandum by the Minister in China (Johnson)

NANKING, March 7, 1931.

I asked the Minister for Foreign Affairs whether anything had been done about the claims arising from damage to property in Changsha last summer.10 He expressed the view which he had given before, namely, that the Government was not liable for damage done by rebels.

I stated that in this case we felt that the Government had failed to protect foreign property as the Governor of Hunan had withdrawn his forces from the city without warning and had left Americans to the mercy of the invading forces which had systematically undertaken to destroy and loot American property.

The Minister for Foreign Affairs stated that the Government had gone into the question of responsibility of the Governor of Hunan in this matter at the time when his name was before the Executive Council for possible cashiering, that General Ho Chien and the military had satisfied the Government that a withdrawal of Government forces from the city was the only move that the military could undertake at the time in order to protect their forces and enable them to collect and retake the city.

7 Foreign Relations, 1930, vol. II, p. 581.

Ibid., p. 583.

'Copy transmitted to the Department by the Minister in his despatch No. 881, March 18; received April 25.

10 For previous instruction, see Department's telegram No. 424, December 9, 1930, 5 p. m., Foreign Relations, 1930, vol. 1, p. 220.

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