393.115/132: Telegram

The Secretary of State to the Consul General at Hankow (Josselyn)

Your January 14, 10 a.m. According to the Department’s records the Central Aircraft Manufacturing Company, a China Trade Act corporation organized by three American aviation companies, entered into a contract with the Chinese Government under date December 8, 1933, under the terms of which the company agreed to build and equip a factory near Hangchow for the manufacture, assembly, and repair of airplanes, and to furnish American supervision and technical personnel; and the Chinese Government agreed to bear all expenses, other than first costs, of the maintenance and operation of the factory, and to insure against all insurable hazards including war. The contract also provided that the factory shall become vested in the Chinese Government at the end of 5 years, and contained a reservation of the right of that Government to take over the factory at any time within the 5-year period. If this or any similar contract is applicable to the factory at Hankow, it would seem that the factory should be considered as fundamentally a Chinese enterprise involving no substantial American interest which can properly claim American protection.

Copies of the contract referred to above are on file at Peiping and Nanking, detailed information in regard to which may possibly be procurable from the Embassy staff at Hankow.