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(a) Out of funds in Germany. Where such payment is necessary to protect the property or interests of an American citizen, it is not objectionable for such payments to be made.

(6) Out of funds sent to Germany from Switzerland. It is undesirable for money to be paid out to an enemy under any circumstances, except in the event that such payment is absolutely necessary for the actual preservation of American

property or interests of greater value than the payment. 2. Question of insuring against fire real estate owned in Germany by private citizens or by American-owned corporations.

(a) Out of funds in Germany. There is no objection to such insurance being paid out of funds in Germany.

(6) Out of funds sent to Germany from Switzerland. If such insurance is absolutely necessary to protect the American against possible loss of his property, it would seem unobjectionable for such payment to be made. All efforts to effect such insurance in neutral countries should be exhausted before in

surance is taken out in a German company. 3. Question of paying taxes in Germany.

(a) Out of funds in Switzerland. The same principles as above stated apply here.

A caution should be added, however, with reference to the cases of making payments for the protection of property. It should be clearly determined before such payments are made that the property in question has not been, or will not be confiscated or taken over by the German Government, as the making

of payments is entirely futile if this is the case. 4. Question of paying premiums due on life insurance policies, et cetera.

(a) In German or Austrian branches of American companies. It is undesirable that such payments be made in any case.

(6) In purely German or Austrian life insurance companies. It is undesirable here also that such payments be made in any

case.

I am [etc.]

ROBERT LANSING

TRADING WITH THE ENEMY IN CHINA

File No. 763.72112/3494
The Minister in ('hina (Reinsch) to the Secretary of State

[Telegram]
PEKING, April 14, 1917, 11 a. m.

[Received April 14, 5.30 a. m.] I beg to request instructions as to the permissibility of commercial relations (between] Americans and Germans in China.

REINSCH 59665—33

-28

File No. 763.72112/3494
The Secretary of State to the Minister in China (Reinsch)

[Telegram]

WASHINGTON, April 23, 1917, 5 p. m. Your April 14, 11 a. m. Apparently no obstacle in law of United States to commercial relations between Americans and Germans in China, but as a matter of policy they should be discouraged. How extensive are such relations?

LANSING

Tile No. 763.72112/3617

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

No. 1454

PEKING, April 14, 1917.

[Received May 12.] Sir: In connection with my telegram of today relating to commercial intercourse between American citizens and Germans resident in China, I have the honor to enclose a copy of an instruction (No. 2291) of the 13th instant, to the American Consul at Changsha.

I have the honor to request your instructions particularly on the point as to whether the military cooperation of the United States with France and Great Britain would affect the established American rules concerning enemy domicile, as relating to incidents in China. I have [etc.]

PAUL S. REINSCH

[Enclosure]
The Minister in China (Reinsch) to the Consul at Changsha

(Johnson)

C. No. 2291

PEKING, April 13, 1917. Sir: Replying to your despatch (No. 112) of the 2d instant, I have to advise you that the Legation approves the position taken by you, that no opposition should be offered to proper attempts of the Chinese authorities to ascertain the whereabouts, and to acquaint themselves with the names and numbers, of German subjects, even though employed by American firms or missions, or resident upon property owned by them.

In regard to the question of relations between American citizens and German subjects in China, in view of the state of war now existing, the Legation hopes to be able to communicate to you in the near future the views of our Government. In the meanwhile, the Legation offers tentatively for your guidance the following observations:

In the view hitherto adhered to by the American Government, the test of enemy character has been domicile rather than allegiance; and it is at least doubtful whether residence in China, under the extraterritorial jurisdiction of an enemy government, would under that rule be held to be an enemy domicile. There is therefore a question whether, under the rule referred to, American citizens would be precluded, on the principle of non-intercourse with enemy nationals, from relations with German nationals resident in China, in matters of business purely local in character, i. e., unconnected with the trade of the German Empire. Such a conclusion is, however, complicated by certain other considerations. In the first place, the American Government is now understood to be acting for belligerent purposes in military cooperation with certain countries (such as France) which have hitherto accepted allegiance rather than domicile as the test of the enemy character, and with Great Britain which during the course of the present war has (by orders in council and regulations in regard to enemy trading) extended the scope of the term “enemy domicile ” to include the subjects of enemy nations resident in countries where the system of extraterritoriality prevails: and there appears to be some ground for the contention that the legality of transactions by American citizens might (at any rate in certain circumstances) be affected by the principles adopted by the nations with which the American Government is cooperating as a belligerent. It is furthermore to be borne in mind that the circumstances of the present war may not inconceivably force our Government to the adoption of a more inclusive and more drastic rule than it has hitherto followed in the determination of enemy character; so that, apart from other less material considerations, a reasonable sense of expediency would bid Americans to act with the utmost circumspection in dealing with persons or firms of German nationality, and particularly in entering upon any transactions with them involving future obligations or commitments of any sort. I am [etc.]

PAUL S. REINSCH

File No. 763.72112/3617

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

No. 636

WASHINGTON, June 27, 1917. Sir: The Department has received your No. 1454 of April 14, 1917, in which with reference to previous correspondence relative to commercial intercourse between American citizens and Germans resident in China, you request instructions as to whether the military cooperation of the United States with France and Great Britain would affect the established American rules concerning enemy domicile, as relating to incidents in China.

There is now pending before Congress a measure having for its object the prevention of trade directly or indirectly for, with, on behalf of, or on account of any person residing in Germany or residing in a neutral country and doing business with Germany.

As bearing on the general question of intercourse with the enemy, the Department may refer you to Moore's International Law Digest, volume 7, page 237; reference may be made also to page 424, of the same volume.

The Department may call your particular attention to the following cases: Montgomery v. United States, 15 Wall. 395; Scholefield v. Eichelberger, 7 Pet. 586; Kershaw v. Kelsey, 100 Mass. 561.

The rules enunciated by the courts in the above-cited cases would appear to be applicable, until such time as they might be altered by statutory enactments, to the relations between Americans and Germans in China. I am [etc.]

ROBERT LANSING

File No. 763.72112/4382

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

No. 1565

PEKING, July 13, 1917. .

[Received August 14.] SIR: I have the honor to transmit herewith a copy of the Legation's instruction (No. 2550) of today's date to the Consulate General at Shanghai. This instruction is in answer to a despatch reporting that the British Consul General had suggested that, pending the adoption of enemy trading regulations by the United States Government, the American Consulate General advise all American shippers in its consular district that the procedure with respect to trading with enemy aliens will be as heretofore; that is to say, they would have to comply with the British enemy trading regulations in shipping cargo on British or Allied ships. As a matter of fact, the Consulate General has not definitely or officially recognized the British enemy trading regulations, and to follow the suggested procedure would seem to do so.

There is also enclosed copy of despatch (No. 1278) of April 25, 1917, from the Consulate General at Shanghai, relating to the same subject. It would seem that the individual status of the firms mentioned in this despatch is a matter primarily for decision by the Department of Commerce.

I have the honor to request your instructions with respect to the attitude to be assumed towards British enemy trading restrictions. I have [etc.]

PAUL S. REINSCH

* Not printed.

[Enclosure 1]

The Minister in China (Reinsch) to the Consul General at Shanghai

(Sammons) C. No. 2550

PEKING, July 13, 1917. SIR: I have to acknowledge the receipt of your despatch (No. 1376) of the 23d ultimo, and in reply to advise you, that as the American Congress has not yet enacted an enemy trading code no laws exist on this matter which are applicable to American citizens. The Legation and the consulates have no authority to render applicable to our nationals the legislation of any foreign power, no matter how friendly. It will therefore be impossible to comply with the suggestion of the British Consul General.

The following is given you for your personal guidance: As a matter of practice our interests do pretty closely coincide, nowadays, with those which the British have embodied in their laws; and most Americans will, as a matter of personal feeling, conduct their transactions in a way as little repugnant to British laws as though actually subject to those laws and will not be averse to volunteering, either to their own consular representatives or to those of an Ally, affidavits establishing that there is no enemy taint in their various dealings. We have no authority to tell them that they must do so, or threaten them with the penalties of British law if they don't; but it seems to me that it would be no very complex matter for our consul to intimate to our nationals, as occasions arose, that as Americans they might without loss of self-respect volunteer to swear that this transaction was not in the interests—direct or indirect—of any national of a country at war with the United States, or with any nation now acting in military cooperation with the United States.

It is desired that you should give the Legation your opinion on the feasibility of this provisional procedure. I am [etc.]

Paul S. REINSCH

File No. 763.72112/4382

The Secretary of State to the Minister in China (Reinsch) No. 676

WASHINGTON, August 31, 1917. SIR: The Department has received your despatch No. 1565, of July 13, 1917, enclosing a copy of an instruction to the American Consul

Filed separately under File No. 763.72112/13$1.

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