File No. 763.72112A/2130

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


Denby for War Trade Board:

No. 25. British Government by notice of Peking Legation dated January 1, 1917,1 declared all subjects of enemy nationality in China to be enemies and forbade all transactions with them. Further provided that all sums payable to an enemy should be paid into a designated bank and disposed of only on order of British court at Shanghai. The above order was based on China orders in council of 1904 and 1907. The American Trading with the Enemy Act in like manner must be enforced in China or illicit dealings with, and on behalf of, enemies by Americans will result and we will be charged justly by our allies with the lack of cooperation in an essential war measure. I have many letters from upright Americans asking how they can conform to the requirements of Trading with Enemy Act. I renew my advice in telegram No. 21 that the Legation, through the Naval Attaché, exercise the functions of custodian of enemy property, and that he be empowered to authorize proper business transactions with enemies in China. This authority could probably be conferred by presidential proclamation without additional legislation.

  1. Probably refers to note 3 to order in council of Jan. 5, 1917.