793.003/850

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

No. 335

Sir: I have the honor to state that the Embassy has occasionally encountered a rather hazy impression on the part of persons advocating [Page 635]the abandonment of American extraterritorial jurisdiction in China that submission by American citizens in China to the laws of the country will bring many compensating advantages, among them the privilege of residing and of engaging in business in all parts of the country and the enjoyment, in general, of the same body of rights as Chinese citizens.

That this supposition is not in accord with the intention of the Chinese Government has been indicated in replies to direct questions put to Chinese officials. On this point, also, the Treaty of Amity between China and Latvia, signed in London on June 25, 1936,23 states in Article V:

“They (i. e. the nationals of the contracting Powers) shall have the right, subject to the laws and regulations of the country, to travel, reside, work and engage in commerce and industry in the localities where the nationals of any third country are allowed to do so”.

(For the text of the Treaty see despatch No. 920, of December 16, 1936, from the Embassy, Peiping.24) Latvia does not exercise extraterritorial jurisdiction in China.

This subject was recently brought to the attention of the Embassy by a press release of the official Central News Agency bearing the date-line, Nanking, January 29, 1937, which asserts that no difference will be made in rights of residence granted by the Chinese Government to nationals of non-extraterritorial powers, as contrasted with nationals of countries possessing extraterritorial jurisdiction in China. An interesting statement in the release is one to the effect that non-extraterritorial foreigners will be subject to the same taxation as Chinese citizens. The implication is plain that, in the mind of the anonymous “well-informed” speaker, extraterritorial foreigners are not subject to such taxation. In reference to this it may be observed that although extraterritorial foreigners in China do, in fact, successfully maintain their immunity from many forms of taxation in China, the present Political Vice Minister for Foreign Affairs in conversation with an officer of the Embassy has denied any logical basis for the contention that the immunity from Chinese court jurisdiction granted by some treaties carries with it freedom from the obligation to pay the usual taxes collected by the Government of a country from foreigners living in its territory.

A copy of the Central News Agency press release referred to above is enclosed.25

Respectfully yours,

Nelson Trusler Johnson
  1. League of Nations Treaty Series, vol. clxxvi, p. 275.
  2. Despatch not printed.
  3. Not reprinted.