File No. 763.72112/4382

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

No. 676

Sir: The Department has received your despatch No. 1565, of July 13, 1917, enclosing a copy of an instruction to the American Consul [Page 438] General at Shanghai, China, in regard to trading with the enemy aliens.

In reply you are informed that the whole question of trading with the enemy is receiving the consideration of the Government at the present time. By an order in council of April 27, 1917, all firms in the United States, the Philippine Islands and Porto Rico were removed from the statutory black list and similar action was taken with reference to firms in the United States upon the confidential black list. There is enclosed a copy of a bill now pending in Congress dealing with the subject of trading with the enemy,1 and the Department will inform you in the event that this or another bill on the subject is passed by Congress.

It will be observed from the text of this bill that the matter of enemy character being, with some minors exceptions, based on the principle of domicile, and not on the principle of enemy nationality or association, the Government cannot therefore give its sanction to the British black list or the theory upon which it was created.

For your information there are enclosed copies of the President’s proclamations of July 9 and August 27 last (together with his explanatory statements)2 prohibiting, save under license, exportation from the United States of certain articles therein set forth. The application of these proclamations is intended to supplement the proposed Enemy Trading Act and to attain as one object the prevention of trade directly or indirectly with, on behalf of, on account of, [or] for the benefit of the enemy, as the term “enemy” is defined in the proposed act.

I am [etc.]

For the Secretary of State:
William Phillips
  1. Not printed.
  2. Proclamations printed in Foreign Relations, 1917, Supplement 2, vol. II, pp. 903 and 933, respectively. Explanatory statement to the former not printed, to the latter printed on p. 937 of the same volume.