File No. 763.72/6745

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


Your September 6, 11 a.m.1 The British Embassy here informs the Department that according to a telegram from the British Chargé d’Affaires at Peking the Chinese Cabinet has decided to charter seized German and Austrian vessels to Chinese merchants who will be permitted only to sub-charter to Allies.

The British Government proposes that if the American Government will concur, the British Chargé d’Affaires at Peking will be [Page 688] instructed to arrange that one-third of the enemy tonnage including the Albenga be sub-chartered to a British firm or to the British Government, these vessels to be allocated for employment by the Inter-Allied Chartering Committee equally among British, French and Italian Governments. The United States will then be left to arrange with the Japanese for the sub-chartering of the remaining two-thirds. The British Embassy states that the Chinese Government has refused to reconsider its decision not to sell the enemy ships but has promised that the British Government in conjunction with the Japanese Government shall be given first refusal to sub-charter.

The American Government is deeply concerned in the matter and feels that its interests also should have consideration.

Please very discreetly investigate and report at once upon the following points.

If the American Government accepts the proposal of the British Government as outlined above will China acquiesce?
If the American Government accepts the British proposal will Japan in your opinion acquiesce in our obtaining one-third?
The Department is informed that the Austrian vessels Bohemia, Silesia and China were purchased before China entered the war by the Mohawk Navigation Co., an American corporation, but the purchase price has not yet been paid to the Austrian agents. The Mohawk Co. states it is willing to pay the purchase price to China if delivery of boats is made. Will the rights of the corporation be recognized in any way?
In your opinion would it be possible for the United States without negotiating with any powers but China to obtain from the Chinese Government one-third of the enemy tonnage upon the assurance that it will be used in the service of the powers at war with Germany and upon the understanding that Great Britain and Japan will each receive one-third?
  1. Not printed.