893.6359 Antimony/19

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

No. 3503

Sir: I have the honor to refer to my despatch No. 3441 of March 19, 1935, regarding the Hunan Antimony Syndicate, and to enclose a copy, in English translation, of a note received from the Acting Minister for Foreign Affairs under date of April 4, 1935,71 in reply to the Legation’s note of February 11th protesting against the Foreign Office’s interpretation of the relevant treaty provisions.

It will be observed that Acting Minister Wang Ching-wei in his note does not actually undertake a refutation of the particular points of the Legation’s argument. He resorts instead, as in his note of January 25, 1935,72 to the general contention that the treaty provisions cited refer only to hong, or “quasi-hong”, organizations of “third party” interests. This contention is supported by the general denial that the Hunan Antimony Syndicate in particular is more than “a joint business organization incorporated by mining merchants themselves”, which “naturally cannot be compared with a monopoly or control in between by a third party.” This somewhat unsatisfactory manner of argument suffices for Dr. Wang Ching-wei to reach the conclusion that there is “no conflict whatsoever” with the treaty provisions cited.

The substance of the position taken by the Nanking Government as regards the subject of monopolies seems to lie in the Chinese feeling, indicated in both of the above-mentioned notes, that monopoly organizations such as the Hunan Antimony Syndicate are modelled along lines now being followed in other countries in the establishment of production-syndicates and collective enterprises, and that the Chinese have the same right, irrespective of treaty provisions, to organize for production and distribution in that manner. The indications are that the Chinese Government is prepared to encourage the development of such organizations as rapidly as circumstances permit.

At the same time, the attitudes of Japan and Great Britain concerning the general subject of monopolies in China are not clear except insofar as there is a breach of the pertinent provision in the Nine Power Treaty imposing restrictions on the acquirement of monopoly rights in China by foreign interests. The British Legation, in fact, seems to doubt whether the relevant treaty provisions were ever meant to be prohibitive of such purely Chinese monopoly organizations, the treaties in question having been negotiated long before [Page 779] modern commercial and political developments could have been foreseen. It may be noted that the Japanese have evidently not cited the Sino-French Treaty of 1858 in their discussions regarding the matter with the Chinese authorities, and that Mr. Suma seemed interested in the idea that the treaties could be cited in argument against such monopoly organizations as the Hunan Antimony Syndicate in its purely Chinese aspect.

In these circumstances, the instructions of the Department are respectfully requested as to the procedure to be followed in the further pursuit of this matter.

Respectfully yours,

Nelson Trusler Johnson
  1. Not printed.
  2. Not printed; for substance of note, see Legation’s telegram No. 56, February 1, 7 p.m., p. 771.