811.5034 (China) Thrift and Investment, Finance and Trust Corp./32: Telegram
The Secretary of State to the Minister in China ( Johnson )
Washington
, May 28,
1934—7 p.m.
155. Your 214, May 17, 5 p.m.5 in regard to the Thrift and Investment, Finance and Trust Corporation.
- 1.
- Department concurs in the Legation’s opinion that the Department’s instructions No. 279, December 11, 1922, to the Legation,5 and of January 15, 1931, to Shanghai,5 contain sufficient authorization for the Consul at Harbin to refrain from actively assisting this corporation as long as it is unable to present satisfactory proof of a substantial American interest therein.
- 2.
- As American law confers American nationality upon a corporation organized under the laws of any of the States of the United States regardless of actual American interest involved, the Department does not feel that it is in position to authorize the Consul at Harbin to advise the bank to refrain from using the American flag because, if the bank refused, the Department knows of no way in which we could exercise compulsion in the matter. Also, the Department is inclined to feel that, if it has been customary for the bank to fly the American flag and if the bank now refrained from doing so upon advice from the Consul, the Manchukuo authorities might assume that the bank is no longer American and attempt to assume jurisdiction over it, which attempt the Consul would, under existing instructions, be required to oppose. The Department believes, therefore, that it is not desirable to raise at this time the question of the flying of the flag.
- 3.
- If the Manchukuo authorities should attempt to assume jurisdiction over the bank’s business and property, the Consul should inform those authorities, orally if possible, or by addressing them by title without reference to Manchukuo, that the bank is an American corporation organized under the laws of the State of Nevada (if in fact the bank can prove to the satisfaction of the Consul that its charter from that State is still in force). He should then inform the Department of all the facts which gave rise to such action and await instructions.
- 4.
- With regard to the Legation’s statement that the Department might recognize the Manchukuo banking laws as applicable to American banks in Manchuria, the Legation’s attention is invited to the fact that, as the American Government does not accord recognition to [Page 1101] Manchukuo, it follows therefore that the Department does not recognize the legal applicability of any of Manchukuo’s acts to American nationals. However, the Department is not disposed to place any objection in the way of voluntary compliance with Manchukuo banking laws and regulations by American nationals doing business in Manchuria if they feel that such action is necessary for the conduct of their businesses. This is especially true in the case of the bank in question, as it is not entitled to the full protection of the American Government, because of the absence of a substantial American interest.
- 5.
- With regard to the “precarious” activities of the bank referred to by the Consul, the Department desires that the Consul make a complete report of what he means by such activities in order that the Department may be in position to give consideration to the question of bringing such activities to the attention of the authorities of the State of Nevada to the end that those authorities may in turn give consideration to the question of cancelling the charter if it is found that such activities are contrary to law.
- 6.
- Department notes that your telegram was despatched in the non-confidential gray code. Caution should be exercised in the use of that code for matters of this nature.
Hull