893.42/360
Memorandum of Conversation, by the Chief of the Division of Far Eastern Affairs (Hamilton)16
| Participants: | Dr. Alfred Sze, Former Chinese Minister, Member of Board of Trustees of the China Foundation |
| Mr. Hamilton | |
| Mr. Atcheson |
Dr. Sze called at his request on Mr. Hamilton this morning.
Dr. Sze stated that he and Dr. Hu Shih had recently received a telegram from Dr. Wong Wen-hao, Chinese Minister of Economics in Chungking, one of the trustees of the China Foundation, in regard to the question of the rights of the Foundation to Boxer Indemnity funds. It was stated in the telegram that Dr. Wong had mentioned this matter to Ambassador Gauss; that Mr. Gauss said he would refer it to Washington; that there had also been some discussion by Dr. Wong with Dr. T. V. Soong17 and Dr. Sun Fo;18 that Dr. Soong and Dr. Sun Fo had indicated that they felt that the work of the Foundation should go on; that Dr. Soong had said he would endeavor to obtain the Generalissimo’s19 approval; that Dr. Soong had also stated, however, that payments to the Foundation would cease upon the coming into effect of the new treaty on extraterritoriality; and that certain influential people in the Chinese Government considered that the Chinese Government should take over the Foundation’s fund.
Mr. Hamilton stated that Mr. Gauss had telegraphed the Department in regard to the question of what obligations might rest on the Chinese Government to continue paying to the Foundation remitted Boxer Indemnity funds. The Department had informally, in response to the inquiry, expressed the opinion that Article II of the new treaty made it clear that all of this Government’s rights under the Boxer [Page 706] Protocol and under supplementary agreements thereto would cease upon the coming into effect of the new treaty on extraterritoriality; that this Government’s rights in regard to the bond given by the Chinese Government pursuant to the Protocol would also cease; that although this Government’s rights in regard to Boxer Indemnity funds would be terminated by the treaty and this Government would therefore be eliminated as an agency in any transaction involving payment of such funds to the China Foundation by the Chinese Government, it seemed to us that there rested upon the Chinese Government some legal as well as moral obligation to pay to the Foundation the remitted sums due but not paid up to the time of the coming into effect of the treaty. Mr. Atcheson went on to say that it is our opinion that the treaty will not itself affect the relationship between the Chinese Government and the Foundation; that such relationship will be a matter for determination by those two organizations, with due regard for the considerations mentioned above; but that, as Mr. Hamilton mentioned, the Chinese Government would, in the light of the considerations upon which the Boxer Indemnity payments had been remitted, seem to have legal as well as moral obligation to continue to hand over to the Foundation sums due but not paid up to the time of the coming into effect of the treaty.
Dr. Sze asked whether he could construe the informal expression of opinion given by the Department as meaning or implying that the Department expected that the China Foundation would continue in existence. Mr. Hamilton and Mr. Atcheson replied that the Department’s comment carried with it, in their opinion, an assumption that the China Foundation would continue in existence as long as and in so far as that were made possible by the payment to it of payments in arrears up to the time of the going into effect of the treaty on extraterritoriality.
Dr. Sze had referred to the fact that he was in Washington as Chinese Minister at the time when there had been worked out the procedure under which this Government had in 1925 made remission of the remaining Boxer Indemnity funds. Dr. Sze said that the term “Foundation” had been used because there had been a desire to have the remitted funds constitute a permanent fund for the purposes mentioned, which fund would always be a memorial of the liberal and generous attitude of this Government. Dr. Sze indicated that he was of the opinion that remitted funds already paid to the Foundation were the property of the Foundation and constituted a direct gift to the Foundation from the American Government. Dr. Sze said that the China Foundation was a legal entity under Chinese law and that in his opinion the Chinese Government had no more right to take over [Page 707] the funds of the China Foundation than it would have to take over the funds of any other Chinese legal person. With regard to this last mentioned point, Mr. Hamilton stated that this question had not previously been raised with the Department. Neither Mr. Hamilton nor Mr. Atcheson gave any expression of opinion on the point.
After further informal discussion of various aspects of the Foundation’s activities and problems, and thanking Mr. Hamilton and Mr. Atcheson, Dr. Sze departed.