Foreign Relations of the United States: Diplomatic Papers, 1943, China

893.51/7656: Telegram

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

Washington, January 20, 1943.

106. For Adler from the Secretary of the Treasury. Reference your TF–75 continuing TF–74,⁷ paragraph 2, December 11, 1942.

(1) (a) With reference to your inquiry (A) as to the status of savings certificates issued by Chinese banks mentioned, such certificates constitute “securities” within General Ruling No. 5. On importation into United States, these certificates would be taken up and delivered to a Federal Reserve Bank for handling in accordance with the provisions of General Rulings Nos. 5 and 6. The person importing such security or the addressee to whom it is sent may then apply for license for the release thereof. The action taken upon any application for the release of any such certificate would, of course, depend on the facts and circumstances of each case.

(b) With reference to your inquiry (B), postdated checks and drafts issued in exchange for or in lieu of savings certificates by the banks referred to would not be considered “securities” or “currency” within General Ruling No. 5. Accordingly, such postdated checks or drafts would not presently be taken up upon their importation into the United States. The Treasury would be willing to consider subjecting such postdated checks or drafts to controls similar to those exercised under General Ruling No. 5 with respect to imported securities, if the Chinese Government should so request.

(2) Under General Licenses Nos. 60 and 61, as they now stand, certificates, postdated checks, or drafts issued by the Central Bank of China, the Bank of China, the Bank of Communications, and the Farmers’ Bank of China which are transmitted to the United States and, in the case of certificates, released under General Ruling No. 5, may be paid from the accounts of such banks in the United States. In the case of the Bank of China, the Bank of Communications, and the Farmers’ Bank of China, payment of such certificates, checks, or drafts may be made only out of the accounts of the offices within China of these banks.

(3) With reference to question (C) as to the status of the Central Trust and Postal Savings Bank, these institutions come under General License No. 60 to the extent that they act as agents for the Central Bank of China and the Government of China.

(4) Upon maturity of the checks, drafts, or certificates (if the last have been released from the provisions of General Ruling No. 5), the proceeds will be handled in accordance with the terms of Executive Order No. 8389, as amended; that is, if the proceeds are payable to a blocked national, they may be paid into a blocked account. If not payable to a blocked national, these restrictions would not be applicable and payment in the ordinary course could be effected. If any certificate matures while held in a General Ruling No. 6 account, the proceeds thereof would be credited to such an account in the same bank. Any other disposition of the proceeds of any certificate held in a General Ruling No. 6 account may be effected only under license. [Morgenthau.]

Hull

7. Telegram No. 1475, December 11, 1942, not printed.