File No. 763.72112A/1923

The Chargé in China ( MacMurray) to the Secretary of State


No. 21. Denby for War Trade Board:

Americans in China are subject to American law only. The United States Attorney is of opinion that the Trading with the Enemy Act applies to Americans in China, but no American authority in China is designated to administer its provisions. The lack of organized machinery to enforce the act causes confusion. We should take steps to authorize some member of Legation staff to exercise function of bureau of enemy trade who could authorize proper transactions with Germans in this country. The same official should have some of the functions of custodian of enemy property to receive German funds which may pass through American hands. As Germans are not to be deported, this becomes urgent. It is requested [Page 442] that Naval Attaché be instructed to undertake above work, for which he has the proper facilities and which he is willing to do. Above would be simple inexpensive method of defining duties and liabilities of Americans in China under Trading with Enemy Act.

I beg to concur in Denby recommendation. The uncertainty in the minds of Americans as to the applicability of the provisions of the act in this jurisdiction constitutes disadvantageous restriction upon legitimate transactions, and absence of any means of administering the act might become an encouragement to improper dealings.