File No. No. 763.72112/3617

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

No. 1454

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

The Minister in China ( Reinsch ) to the Consul at Changsha ( Johnson )

C. No. 2291

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:

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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