File No. 763.72112/1860

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


British by-law trading regulations, as enforced in China, require in most cases submission by the principals of neutral firms to the British consular officers of all documents, including full detailed information about each transaction covering cargo offered for shipment on British vessels, and American merchants are thereby obliged to disclose to the British authorities information which it is gravely suspected is given to British firms for use to the detriment of American trade. American concerns employing German subjects have been obliged to discharge them before British vessels or banks would be permitted to extend facilities for their China–American trade.

British consular officers have required shipments of antimony and dyes by neutral firms from China to America to be consigned to British Consul General, New York, before allowing space on British vessels, presumably to avoid possible consignment to German tainted concerns in the United States. Guaranty Trust Company, New York, listed by the British Ambassador as notoriously German. Consular officers maintain British white and black lists; American merchants suspected of direct or indirect dealings with British enemy concerns in China or in the United States for import or export trade are blacklisted; and these companies whose business involves the use of British banking or shipping facilities which inadequate American facilities make necessary, are subject to exasperating and humiliating treatment by the British consular authorities before this permission is granted.

Where enemy taint is suspected for falsifying delivery in the United States or import deliveries in China, in some cases even extending to preparation of cargo for shipment or other intermediatory transactions in connection therewith, permission to ship or deliver is refused. The British authorities consider British vessels operating in China trade as common carriers for British subjects only.

Since the withdrawal of American steamers from the Pacific, British authorities have been more exacting in their requirements of neutral shippers. It appears that the action of the British authorities is partially inspired by a desire to monopolize Sino–American trade for British firms, to the exclusion of German and American concerns.

Some American merchants who have exerted every effort to comply with the British regulations, but who nevertheless are not admitted to white list, have appealed to the Legation for assistance; [Page 611] but I hesitate to exercise good offices which might be held to admit the validity of measures taken by British authorities without first having your instructions. In this connection I beg to suggest that it might be possible for the American Embassy at London to negotiate to have British consuls instructed to allow acceptance and delivery of bona fide American cargoes, irrespective of prior ownership, upon affidavits of ownership sworn to before American consuls, and to accept their certificates of American character of firms.