Office of the Historian

793.003/12–942

Memorandum of Conversation, by the Assistant Chief of the Division of Far Eastern Affairs (Atcheson)

[Washington,] December 9, 1942.

(There is attached a copy,1 as furnished Mr. Hornbeck2 by Mr. Liu Chieh2a of the Chinese Embassy, of a telegram from the Chinese Minister of Education at Chungking3 to Dr. Hu Shih, former Chinese Ambassador and a member at present of the Board of Trustees of the China Foundation for the Promotion of Education and Culture. In furnishing this copy, Mr. Liu, and it is believed Dr. Hu Shih, had some preliminary discussion of the question raised in the telegram with Mr. Hornbeck who subsequently sent it to FE4 for consideration and action.)

During the course of a call at the Department on another matter on December 8, Mr. Liu mentioned Dr. Wong’s telegram, stated that the Board of Trustees of the China Foundation was to meet this morning in New York, and requested that, if possible, he be furnished the Department’s opinion on the questions whether (1) there would continue, upon the going into effect of the proposed treaty on extraterritoriality,5 to rest upon the Chinese Government an obligation to pay to the China Foundation the remitted sums, amounting to about $5,000,000, payment of which had been held in suspense; and (2) whether, in such case, payment would continue to be made by the Chinese Government to the American Government for transfer to the China Foundation (it is understood that under procedure existing before the war the Foreign Office delivered to the American Consulate General at Shanghai a check and the Consulate General endorsed the check over to the China [Page 702] Foundation so that as far as this Government is concerned the transaction was purely a paper one).

I discussed this matter with Mr. Hiss6 of PA/H and subsequently with Mr. Hackworth,7 and as a result of that discussion telephoned Mr. Liu and stated that I was able to give him an informal opinion based principally upon the language of the Executive Order (no. 4268) of July 16, 1925,8 whereby the President authorized and directed the Secretary of the Treasury to remit to the Board of Trustees of the China Foundation, as the agent designated by the Chinese Government to receive them, all payments of the annual installments of the Chinese indemnity made subsequent to October 1, 1917, et cetera. I said that it appeared that such authorization and direction was given by the President in the light of various considerations, as follows: that a Joint Resolution of Congress approved May 21, 1924,9 authorized the President in his discretion to remit to China all future payments of the annual installments of the Chinese indemnity; that the Chinese Minister informed the Secretary of State on June 14, 1924,10 that the Chinese Government proposed to devote the funds thus made available to educational and cultural purposes and to entrust the administration of the funds to a Board composed of Chinese and American citizens; that the Chinese Minister on September 16, 1924, forwarded to the Secretary of State a copy11 of the constitution of the Board which he stated had been designated “The China Foundation for the Promotion of Education and Culture”; and that the Chinese Minister on June 6, 1925, informed the Secretary of State12 that the Board was a corporate body instituted by a mandate of the President of China on September 17, 1924, for the custody and control of the remitted indemnity funds.

I went on to say to Mr. Liu that it accordingly seemed that, although the proposed treaty on extraterritoriality would terminate any rights of this Government in regard to Boxer Indemnity funds (whether future funds or whether past funds due but not yet paid) and would therefore eliminate this Government as an agency in any transaction involving the paying of such funds from the Chinese Government to the China Foundation, the treaty would not ipso facto affect the relations of the Chinese Government with the Board and would not affect any obligations of the Chinese Government to the Board such [Page 703] as those indicated in the Executive Order above mentioned. I added that accordingly it seemed to me that there rested on the Chinese Government some legal as well as moral obligation to pay to the Board the sums due but not paid up to the time of the coming into effect of the treaty.

At Mr. Liu’s request I told him that we would send him a copy of the Executive Order in question and subsequently did so.

George Atcheson, Jr.
  1. Not printed.↩
  2. Stanley K. Hornbeck, Adviser on Political Relations.↩
  3. Minister Counselor of the Chinese Embassy.↩
  4. The telegram was sent by Wong Wen-hao, Chinese Minister of Economic Affairs.↩
  5. Division of Far Eastern Affairs.↩
  6. See bracketed note, p. 600.↩
  7. Alger Hiss, Assistant to the Adviser on Political Relations.↩
  8. Green H. Hackworth, Legal Adviser.↩
  9. Foreign Relations, 1925, vol. i, p. 935.↩
  10. 43 Stat. 135.↩
  11. Foreign Relations, 1924, vol. i, p. 555.↩
  12. Note and enclosure not printed.↩
  13. Text of note not printed; for summary, see Executive Order No. 4268, July 16, 1925, Foreign Relations, 1925, vol. i, pp. 935, 936.↩