393.115 Texas Oil Company, No. 2/12: Telegram
The Secretary of State to the Counselor of Embassy in China (Lockhart), at Peiping
105. Your 226, May 18, noon.73 The Department approves your proposal to inform the Consulate at Foochow that there is no federal statute governing the use of the American flag. You should invite the Consulate’s attention to the Department’s mail instruction to the Legation, no. 419, June 15, 1923, cited in the Embassy’s telegram under reference, and to the Department’s earlier instruction to the Legation, no. 223, September 11, 1922.74
With regard to the specific case raised by the Consulate, no objection is perceived to the flying of the American flag upon the launch in question provided that (a) such practice is not prohibited by the local laws and regulations of the Chinese Government, and (b) careful investigation by the Consulate shows that the launch is regularly chartered by the Texas Company in good faith for use only in the company’s legitimate business.
The same attitude would normally appear to be applicable to lighters and junks hired and employed exclusively for the transportation of American owned cargo. As, however, the lighters and junks employed by the Texas Company at Foochow presumably are not chartered regularly by the company but are hired periodically when needed, the Department shares the Embassy’s apparent apprehension in regard to sanctioning the use of the American flag as a general practice by such Chinese vessels. Nevertheless, the Department would hesitate to disapprove the use of the American flag for the protection of American cargo in circumstances where such use might be beneficial to the American interest concerned. It is accordingly suggested that the Consulate (a) decline to give the Texas Company’s manager blanket approval for the flying of the American flag on the lighters and junks in question and (b) treat each case in which use of the flag is desired by the company as a separate case to be considered on its merits with a view to favorable action in appropriate circumstances. In this connection the Department is mindful of the Consulate’s statement that the company’s lack of vessels of its own, places it at a disadvantage in transporting its cargo from Sharp Peak to Foochow along a section of the river in which Chinese shipping is under Japanese attack.