793.943 Manchuria/34: Telegram
The Counselor of Embassy in China (Lockhart) to the Secretary of State
[Received November 26—9:10 a.m.]
784. Embassy’s 733, November 6, 11 p.m. and 783, November 25, 11 p.m. [a.m.] Mukden now reports by despatch its belief that Manchukuo will attempt exercise jurisdiction over American citizens and firms as of December 1. Harbin has submitted text recently promulgated “law concerning foreign juridical persons” (presumably effective December 2), primary purpose of which apparently is control activities in Manchuria of large Japanese commercial houses subsequent abolition extraterritoriality December 1, but which may affect other foreign interests in Manchuria as well. Consulate has transmitted copy of letter received by the National City Bank from Hsinking Department of Economics stating that the legislation “naturally” applies to all foreign firms and requesting preparation be made to register and to appoint a representative for Manchukuo in accordance with the law. Law provides for foreign firms operating in Manchuria only though [through?] a branch or that are foreign juridical persons. Law extends substantial control of the local authorities over such juridical persons, but it would appear that it is not intended actually to be unduly harsh in application. Such juridical persons are given 6 months from the date when the law goes into effect to fulfill the legal requirements.
The Embassy at Tokyo in its despatch No. 2661, November 10,63 observes that the abolition of extraterritoriality by treaty between Japan and Manchukuo will probably result in due course in the impairment or abolition of like rights enjoyed by third nations, and that the Embassy is considering the advisability of approaching the Foreign Office with the aim of obtaining Japanese Government’s views regarding the future bearing of the treaty on American extraterritorial rights in Manchuria. This would seem to constitute a good initial approach to the present difficulty.
[Page 940]Harbin proposes that the two American firms which would be affected by the judicial [Juridical] persons law be advised as regards question of taxation (Embassy’s despatch No. 1194, April 2063a) that compliance with the new law is a matter for the firms’ decision alone. I concur in Harbin’s suggestion on which the Department’s instructions are respectfully requested, as well as on the general question of extraterritorial rights in Manchuria, on which question the Department may desire to await any investigation which may be undertaken by Tokyo. Instructions are also requested on the question of the attitude which should be assumed by Consulate at Mukden and Harbin in case of arrest of an American citizen on or after December 1.
Sent to the Department. Repeated to the Ambassador at Hankow and to Tokyo.