Papers Relating to the Foreign Relations of the United States, 1925, Volume I

793.00/163a

Statement Issued to the Press by the Department of State, August 31, 1925²⁶

August 31, 1925

Speech of the Honorable Frank B. Kellogg, Secretary of State, Before the Annual Meeting of the American Bar Association, Detroit, Michigan, September 2, 1925

Mr. Kellogg said:

The events in China of the last few months have again brought to the forefront its relations with the other Powers and have made it necessary for the Government of the United States to declare its policy in relation to Chinese affairs. In brief, that policy may be said to be to respect the sovereignty and territorial integrity of China, to encourage the development of an effective stable government, to maintain the “open door” or equal opportunity for the trade of nationals of all countries, to carry out scrupulously the obligations and promises made to China at the Washington Conference, and to require China to perform the obligations of a sovereign state in the protection of foreign citizens and their property.

It is quite impossible in the few moments allotted to me to discuss all the complicated issues involved in the present Chinese situation. I shall, therefore, but briefly sketch the more important, which chiefly concern the conventional Chinese tariffs and the extraterritorial rights of foreign residents in China. The import tariffs, and to some extent the export tariffs, of China are controlled by treaties between China and the various Powers. The first conventional tariff schedule was appended to the first treaty made with Great Britain in 1842;²⁷ the same schedule was added to the first treaty with the United States in 1844,²⁸ and to treaties made with other foreign Powers at later dates. These treaties have been changed and the rates revised from time to time but the principles involved in the original conventional tariff have remained the same. It has become evident that there is a wide feeling in China that the tariff schedules attached to the various treaties have become a severe handicap upon the ability of China to adjust its import tariffs to meet the domestic economic needs of the country. It must not be forgotten, however, that these tariffs were not adopted as a sinister means of controlling the fiscal policies of the Chinese Government but merely as a modus operandi devised to meet and remedy a condition which had become a fertile source of friction in the relations between China and the Powers due to the uncertainties connected with the rates and methods of collecting duties under the then existing tariffs. Schedules of those tariffs were seldom available for the information of foreign merchants, who were hampered in their business by the irregular and arbitrary methods adopted in the assessment and the collection of the duties. It is believed that these conventional tariffs were welcomed not only by the United States and the other Powers but by China as a happy solution of a question which for more than forty years had vexed the relations between China and the other countries.

The last commercial treaty affecting the tariffs between the United States and China was made in 1903²⁹ and various treaties with other Powers were made substantially at the same time. The rates under these treaties have been revised twice since that time.

There seems to be some confusion in the public mind as to just what rights Americans and other foreigners enjoy under the extraterritorial provisions of the treaties with China. I do not have the time to describe in detail the conditions under which foreign merchants lived and carried on their trade in China during the sixty-odd years prior to 1842, the year when immunities as to persons and property, now termed extraterritorial rights, first appeared in a formal treaty between China and a Western Power. It is sufficient for me to say that the account of the relations between resident foreign merchants in China and the Chinese authorities of that period is replete with incidents involving conflicting claims, the foreigner claiming exemption from Chinese law and the Chinese claiming jurisdiction over him and his property. To borrow the language of the Encyclopædia Britannica³⁰ as quoted in Webster’s Dictionary³¹ “extraterritoriality” is defined as a term of international law “used to denominate certain immunities from the application of the rule that every person is subject for all acts done within the boundary [boundaries] of a state to its local laws.” Insofar as China is concerned the British Treaty of Nanking of 1842 marks the legalized beginning of the system of extraterritorial rights in China. Extraterritorial rights as applicable to Americans were first defined in the American Treaty of 1844 which stipulates clearly the method by which the extraterritorial jurisdiction of the United States Government was to be exercised. Article XXI of that Treaty reads as follows:

“Subjects of China who may be guilty of any criminal act toward citizens of the United States, shall be arrested and punished by the Chinese authorities according to the laws of China; and citizens of the United States, who may commit any crime in China, shall be subject to be tried and punished only by the Consul, or other public functionary of the United States thereto authorized, according to the laws of the United States. And in order to the prevention of all controversy and disaffection, justice shall be equitably and impartially administered on both sides.”

With respect to civil suits, between Americans, or between Americans and citizens or subjects of other non-Chinese States, Article XXV of the same treaty provides:

“All questions in regard to rights, whether of property or person, arising between citizens of the United States in China, shall be subject to the jurisdiction of and regulated by the authorities of their own Government. And all controversies occurring in China between citizens of the United States and the subjects of any other Government shall be regulated by the treaties existing between the United States and such Governments respectively, without interference on the part of China.”

As to disputes between citizens of the United States and subjects of China, the same treaty further provides, Article XXIV as follows:

“And if controversies arise between citizens of the United States and subjects of China, which can not be amicably settled otherwise, the same shall be examined and decided conformably to justice and equity by the public officers of the two nations acting in conjunction.”

This last provision was made more specific in the Treaty of 1880,³² Article IV, which reads as follows:

“When controversies arise in the Chinese Empire between citizens of the United States and subjects of His Imperial Majesty, which need to be examined and decided by the public officers of the two nations, it is agreed between the Governments of the United States and China that such cases shall be tried by the proper official of the nationality of the defendant. The properly authorized official of the plaintiff’s nationality shall be freely permitted to attend the trial, and shall be treated with the courtesy due to his position. He shall be granted all proper facilities for watching the proceedings in the interests of justice. If he so desires, he shall have the right to present, to examine, and to cross-examine witnesses. If he is dissatisfied with the proceedings, he shall be permitted to protest against them in detail. The law administered will be the law of the nationality of the officer trying the case.”

Here, as in the case of the conventional tariffs, the Government of the United States introduced into its treaty with China special provisions, not for the purpose of hampering or otherwise limiting the sovereign rights of a friendly nation, but merely as a modus operandi intended to remedy a vexatious condition which had for many years proved what seemed an almost insurmountable obstacle to the maintenance of friendly relations between the two countries. There was not then—and there is not now—any desire permanently to limit the sovereignty of China. Pursuant to these treaties Congress has enacted the necessary laws to enable the American Consuls in China to perform the necessary judicial functions attendant upon the hearing and settling of complaints brought against American citizens by the Chinese. The extraterritorial judicial machinery of the Consular Courts was added to and made more efficient when Congress completed the obligations assumed by the United States and created at Shanghai the United States Court for China which has both original and appellant jurisdiction in cases where American citizens are defendants in China.

In the Commercial Treaty of 1903 between the United States and China, it was agreed as follows: “The Government of China having expressed a strong desire to reform its judicial system and to bring it into accord with that of western nations, the United States agrees to give every assistance to such reform and will also be prepared to relinquish the extraterritorial rights when satisfied that the state of the Chinese laws, the arrangement[s] for their administration, and other considerations warrant it in so doing.” Following this treaty there have been a growing demand in China and an agitation for the abolition of conventional tariffs, of extraterritorial rights, and other special privileges enjoyed by foreigners in China. There have been of late years an advance in education and a growing feeling of nationalism to which is largely due the demand for revision of the treaties in these respects.

China, having taken part with the Allies in the Great War, presented these demands at the Versailles Conference, but the Powers declined to consider them, holding that they were outside the province of that Conference. When the Washington Conference was called by President Harding, it included the consideration of certain Pacific and Far Eastern questions, China again asked for a modification of the treaty rights of foreign Powers particularly as regards the tariff and extraterritorial rights. At that Conference, certain treaties were made: One between the nine participating Powers relating to principles and policies to be followed in matters concerning China and the other between the same Powers relating to the Chinese customs tariff, and a resolution was unanimously adopted in relation to extraterritoriality.³³

In Article I of the Treaty in relation to the principles and policies to be followed in matters concerning China, it is provided that:

“The Contracting Powers, other than China agree:

(1) To respect the sovereignty, the independence, and the territorial and administrative integrity of China;

(2) To provide the fullest and most unembarrassed opportunity to China to develop and maintain for herself an effective and stable government;

(3) To use their influence for the purpose of effectually establishing and maintaining the principle of equal opportunity for the commerce and industry of all nations throughout the territory of China;

(4) To refrain from taking advantage of conditions in China in order to seek special rights or privileges which would abridge the rights of subjects or citizens of friendly States, and from countenancing action inimical to the security of such States.”

The Treaty in relation to the Chinese tariffs in substance provided for a certain revision of the duties, which has already taken place,³⁴ and for the calling of a special conference on the question of abolition of likin, a local transportation tax in China, and granting in lieu thereof certain additional surtaxes to China. This convention was to be called within three months after the ratification of the treaty by all the Powers. These treaties were made in February 1922. They have been ratified by all the Powers and came into force on August 5, 1925, by the deposit on that day of the ratifications with the Department of State in Washington. Resolution V of the Washington Conference, provided in substance that within three months after the adjournment of the Conference, the participating Powers should establish a Commission, to which each Government should appoint one member, to inquire into the present practice of extraterritorial jurisdiction in China and into the laws, judicial system, and methods of judicial administration of China with a view to reporting to the Governments of the several Powers their findings of fact in regard to these matters and their recommendations as to such means as they may find suitable to improve existing conditions of administration of justice in China and to assist and further the efforts of the Chinese Government to effect such legislation and judicial reforms as would warrant the several Powers in relinquishing, either progressively or otherwise, their respective rights of extraterritoriality. The appointment of these delegates to the Conference should have been made in May 1922 but China requested a postponement of one year. All the Powers agreed to a postponement but it proved impossible to obtain any unanimity on the part of the Powers as to a new date and no date has ever been fixed. China now asks for the execution of these treaties and resolutions and, in addition, demands that the various Powers take up with China a general revision of the treaties to the end that ultimately the conventional tariff may be abolished and extraterritorial rights given up.

The Washington Treaty between the nine Powers relating to Chinese Customs tariff having been ratified by all the Powers and ratifications exchanged in Washington on August 5, 1925, that Treaty came into force and the Special Conference has been called to meet in Peking on October 26, 1925. The United States has appointed as its representatives John V. A. MacMurray, American Minister to China, and Silas H. Strawn, a lawyer of Chicago. The Treaty provides for a Special Conference to prepare the way for putting into effect the provisions of previous treaties whereby China agreed to abolish likin and the Powers, in return, consent to an increase in the tariff duties. These prior treaty stipulations had not been executed because China had failed to do away with likin. Another of the duties of the Special Conference is to determine the conditions under which a surtax on imports to be imposed pending the abolition of likin is to be levied. In the invitation which China has issued to the Powers for that Conference³⁵ which is to take place at Peking on October 26, China recalls the fact that its delegates at the Washington Conference when assenting to the terms which eventually were written into the Washington Treaty, stated at the 17th meeting of the Committee on Pacific and Far Eastern questions of the Washington Conference, that it was not their intention to relinquish their position, but that they intended on all appropriate occasions in the future to bring up again for consideration the desire of the Chinese Government regarding tariff autonomy, and it asks that this matter be favorably considered by the forthcoming Special Conference. I believe that the Powers have all come to the conclusion that the Conference will have to be broadened beyond the strict letter of the Washington Treaty. For its own part, this Government is willing, either at this Conference or at some subsequent time, to consider with China a comprehensive revision of the treaties dealing with the entire subject of the tariff.

China is also demanding the abolition of the privileges of extraterritoriality by foreign Governments. This question of extraterritoriality was considered, as I have shown, in our Treaty of 1903, where we promised we would give every assistance to China that we could in the reform of her judicial system and be prepared to relinquish extraterritorial rights when satisfied that the state of the Chinese laws, the arrangements for their administration and other considerations would warrant us in so doing. This subject took more concrete form at the Washington Conference, as I have shown, by Resolution V. Under that Resolution, as before stated, it was provided that a special commission should be appointed to investigate the question of extraterritoriality and Chinese laws and judicial system and to make recommendations as to the means they may find suitable to improve the laws and judicial system of China and to assist and further the efforts of the Chinese Government to effect such legislation as would warrant the relinquishment, either progressively or otherwise, by the Powers of their respective rights of extraterritoriality. The United States is willing to take up the subject and examine it and has appointed as its special commissioner for this purpose Mr. Silas H. Strawn, of Chicago, an eminent lawyer, who is also going to participate in the Tariff Conference. This Government is willing through this Commission to examine the whole question of extraterritoriality and desires the Commission to make a speedy report with recommendations upon their findings which will enable this Government to consider what if any steps may be taken with a view to the relinquishment of its extraterritorial rights. I know, in a general way, that within the last few years China has made some progress in the enactment of laws, in reform of her judicial proceedings, in the education of judges and lawyers, with a view to fulfilling her aspirations to be relieved of these extraterritorial restrictions upon the exercise of her sovereign powers. I believe the people of this country sympathize with these aspirations of the Chinese people and that this Government would be willing to give up these extraterritorial rights as soon as China shall demonstrate that her laws and the administration of the laws and judicial system are adequate for the protection of foreign lives and property within China. China has invited commerce and development and, of course, it is her duty as a sovereign nation to fulfill her obligations under the laws of nations and to protect foreigners in their lives and property. I am sure that the United States has always been most desirous to respect and uphold Chinese sovereign rights and the development of a stable government. I know that I have since I became Secretary of State worked earnestly to carry out the provisions of the treaties and resolutions adopted at the Washington Conference with respect to the holding of the Tariff Conference and the appointment of the Commission on Extraterritoriality. Unfortunately the conditions in China have not been such as to further her aspirations in these respects. I shall not attempt, of course, to review the various changes in government, the fall of the empire and the establishment of the republic, but simply to call attention to the fact that within the last few months, there have been riots and anti-foreign demonstrations which have caused loss of life, not only of foreigners but of Chinese. There has been a recurrence of anti-foreign demonstrations such as has [have] not existed since the Boxer Rebellion. The Powers have been compelled to protect their nationals by armed force. I believe the Chinese Provisional Government has made an effort to restrain this anti-foreign hostility and disorders but its efforts have not been completely successful. Nevertheless, I do not believe that these unfortunate conditions should constitute a reason why the United States and the other Powers should not scrupulously adhere to the pledges they made to China in the Washington Conference to meet her in the spirit of helpfulness with the hope that she may realize her ambitions.

These are some of the problems which will have to be settled in the near future, and, for one, I am willing to face them now, to meet the representatives of the Chinese Government frankly and discuss the whole subject. But these conventional tariffs, extraterritorial rights and foreign settlements have come about through treaty arrangements with China under which thousands of Americans and foreigners have taken up their residence and carried on their business within that country. The United States owes to them the duty of adequate protection and; the Chinese Government must have a realization of its sovereign obligations according to the law of all civilized nations. In the discussion and settlement of these problems, one of the most difficult questions is whether China now has a stable Government capable of carrying out these treaty obligations. I am very sure that the people of the United States do not wish to control, by treaty or otherwise, the internal policies of China, to fix its tariffs, or establish and administer courts but that they look forward to the day when this will not be necessary.

26. For release after delivery of the Secretary’s address.
27. British and Foreign State Papers, 1841–1842, vol. xxx, p. 389.
28. Miller, Treaties, vol. 4, p. 559.
29. Foreign Relations, 1903, p. 91.
30. Vol. x, 11th ed., 1910.
31. First edition, 1919.
32. Malloy, Treaties, 1776–1909, vol. i, p. 239.
33. Foreign Relations, 1922, vol. i, pp. 276, 282, 289.
34. See ibid., pp. 816 ff.
35. See note of August 19 from the Chinese Minister, p. 839.