893.51/5042: Telegram

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

753. 1. The American consul general at Shanghai reported July 14th that the Nanking Government had placed restrictions on export of silver and had ruled that gold and silver bars and coin could not be exported from Shanghai without a huchao from the Ministry of Foreign Affairs at Nanking. In subsequent telegrams, he further reported to the following effect: That the National City Bank requested permission to ship Taels 500,000 on an American warship to its Tientsin branch, as failure to make such transfer would cause very large premium on exchange between Shanghai and the North; that the Commissioner of Customs had notified him of the following detailed instructions of Nanking its [in?] relation to the embargo on Treasury coins: (1) bank notes may be moved without restriction, (2) minted currency may not be exported or transshipped from or through Shanghai, (3) gold and silver bars and sycee cannot be moved to places outside jurisdiction of the Nanking Government but may be moved [Page 470] freely to places within that jurisdiction; that the Hongkong and Shanghai Bank and the Chartered Bank had made arrangements to ship silver to Tientsin by British naval vessels; that the National City Bank had requested, in the event that American Navy cannot arrange to carry silver, that consul general approach British consul general for permission to ship 5 lakhs at the end of July on the British warship Durban; that the bank stated that failure to get specie North would embarrass Tientsin branch in paying the army; that the bank had applied on July 16th for a permit to ship 5 lakhs but had received no reply; that he had requested of Commissioner of Foreign Affairs to expedite reply; and that he did not think proposed action to ship by naval vessel should be delayed as a favorable decision by the Chinese authorities we [was?] unlikely.

2. A few days ago I was approached by the local representative of the National City Bank on this matter; but I replied that in the light of my general instructions, I did not feel that I could undertake to sanction transportation of silver by American naval vessels and I suggested that New York office of bank might desire to discuss the question direct with the Department. Bennett indicated that this course would be followed.

3. I am of the opinion that embargo between Chinese ports which prevents American citizens from shipping silver in the normal course of banking and business requirement (provided such shipments are not conveyed for the interests of Chinese or other nationals) is a violation of our treaty rights. See treaty 1850, article 1531 and treaty of 1858, articles 14 and 15.32

4. Should the Department, however, be reluctant to give its general approval to the transportation of silver by American naval vessels, I think that the probability of the American Government being embarrassed in the making of necessary disbursements in connection with the maintenance of the infantry and marine forces now in Tientsin, does present a new issue and to involve more or less fundamental questions affecting the appropriate protection of American life and property for which purpose those forces have been despatched. I therefore suggest that I be authorized to instruct Cunningham,33 in the event of further obstruction by the Chinese Army, that he may approach American naval authorities with a view to shipment by them to Tientsin of such an amount of silver as may be needed by the National City Bank in connection with disbursements involving expenditures of the American Government.

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5. The suggestion that American citizens be supported in a request to arrange silver shipments by British war vessels is, of course, not to be countenanced.

  1. There is no treaty of 1850 between the United States and China. This refers apparently to art. xv of the treaty of peace, amity, and commerce, signed at Wang Hiya July 3, 1844; Hunter Miller (ed.), Treaties and Other International Acts of the United States of America, vol. 4, pp. 559, 564.
  2. Treaty of peace, amity, and commerce, signed at Tientsin June 18, 1858; Malloy, Treaties, 1776–1909, vol. i, pp. 211, 216.
  3. Edwin S. Cunningham, consul general at Shanghai.