Foreign Relations of the United States, Diplomatic Papers, 1938, The Far East, Volume IV

493.11/2132

The Netherlands Legation to the Department of State⁸

undated

Aide-Mémoire

During the hostilities which took place at Shanghai last year, several properties of Netherlands subjects suffered damage through bombardment, etc. These Netherlands subjects have now requested the Netherlands Government to claim for them compensation for sustained losses and damages of the Japanese and Chinese Governments. The Netherlands Government however is of the opinion that various questions arise in this connection.

First of all the question arises whether sufficient legal grounds can be found for the claiming of these losses and damages considering they resulted from warlike acts committed by the Japanese and Chinese armies.

If in these cases the view is held that the damages resulted from acts of war, the Hague Convention respecting the laws and usages of war on land and the thereto annexed regulation should be considered applicable.⁹ Article 23 of this regulation rules that the destruction and seizure of enemy possessions is prohibited except in cases when such destruction or seizures are imperatively required by the necessities of war. As it is generally accepted that neutrals cannot claim a better treatment as far as their properties are concerned as nationals of the enemy country, it seems that in this case compensation could only be claimed if it could be proved that the damage resulted from “indiscriminate, wanton or general destruction” or “gross negligence”.

It naturally depends upon the circumstances of every specific case whether this has actually been the case.

If however the hostilities in China should not be regarded as acts of war in view of the fact that war has not been formally declared, the question arises whether the fighting parties can be held responsible for the sustained losses in question. At first sight it seems very difficult to find a legal basis for the claiming of damages which so directly resulted from military acts perpetrated in the territory of one State by the regular army of that State and/or by the invading army of another State, unless the claim be based on the fact that the damages resulted from acts committed by Japan or China in disregard of international law and for that reason one of these States would be held responsible for all the damages in question.

It however is extremely doubtful that the Japanese and Chinese Governments would ever be prepared to assume such a responsibility. Still—if the information received is correct—it seems that at the outset of the “incident” the United States, British and French Governments declared to hold the Japanese Government responsible for all losses sustained by their respective nationals resulting from the above mentioned hostilities.

As the Netherlands Government however is not sure that this information is correct it should highly appreciate to be informed whether such a declaration has indeed been made by the United States Government.

Moreover still another question arises in this connection, i. e. whether the properties in question which suffered damages, can be deemed to actually belong to Netherlands (and foreign) subjects, since real estate located outside the International and French concessions can not be owned by foreigners. In practice this difficulty was overcome by having the respective properties registered at the Chinese Law Office in the name of one or other Chinese who held the property “in trust” for the actual owner. Although this question is of no avail in case the view is held that the damages resulted from acts of war considering that in a formal war, as pointed out above, neutral properties are not in a more favorable position than properties belonging to nationals of the enemy country, the difference in nationality of the actual owners might be of importance in case other rules should be held applicable than those of the Hague Convention respecting the laws and usages of war on land.

As undoubtedly many cases have occurred in which properties of American subjects have suffered damage resulting from the above referred to hostilities, the Netherlands Government should be most interested and appreciative to learn if possible which line of action the United States Government is taking in this matter.

8. Handed to Mr. Hugh S. Cumming, Jr., of the Division of European Affairs by the Counselor of the Netherlands Legation on May 12.
9. Signed October 18, 1907, Foreign Relations, 1907, pt. 2, pp. 1204, 1207, and 1211.