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

No. 551

Sir: With reference to the final paragraph of the Department’s 192, February 8, 10 p.m., there is enclosed copy of a memorandum dated November 2, 19435 in regard to informal conversations between Mr. Stanley K. Hornbeck6 and officers of the Far Eastern Department of the British Foreign Office which took place in London on [Page 1010] the subject of the negotiation of new commercial treaties with China. There are also enclosed copies of memoranda of conversations7 held during 1943 with Dr. T. V. Soong8 and with officers of the British Embassy on the same subject which may be of interest to you.

As indicated in the first paragraph of the reference telegram, the Department shares the views expressed in your 84, January 13, 10 a.m. and 99, January 15, 2 p.m.,9 and has noted from these and other reports submitted by you that Chinese thinking on the subject of future commercial relations with the United States and other foreign countries has not yet definitely crystallized. Your suggestion that the draft of our new commercial treaty, if presented to the Chinese, might result in the drawing up of legislation along liberal lines is therefore of especial interest. The Department hopes that you will do whatever may be possible by informal conversations with leading Chinese officials to convince them of the desirability of adopting liberal commercial policies with respect to foreign trade.

As indicated in the reference telegram, work on the drafting of the treaty is progressing but the drafting of a number of articles, particularly those relating to the acquisition of land and other immovable property and to the rights of corporations, present difficult problems. In connection with the problem of the acquisition of land and other immovable property, the Department would appreciate an expression of opinion by you in regard to the intent and meaning of the right granted by the Chinese Government in recent treaties concluded with Great Britain, Norway and Belgium10 to “acquire and hold real property”. Is it your understanding that this language does, in fact, grant to the nationals of the countries mentioned the right to own real property on the same terms as Chinese nationals or is it contemplated that foreign nationals may acquire and hold real property subject to special and restrictive laws and regulations? The Department hopes to receive your detailed comments on the draft after you have received a copy thereof and have had an opportunity to study it, but in the meantime would appreciate your views in regard to the specific question of the acquisition of real property mentioned above.

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Drafting of the consular provisions has been almost completed and it is expected that a copy of these articles will be transmitted to you for your comments at an early date. However, no final decision has been reached in regard to the question of including these articles in a separate consular convention. The Department is inclined to the view that a separate consular convention would be preferable but certain technical difficulties might arise in connection with the termination of the old treaties and agreements with China unless the commercial treaty and the consular convention were signed and ratified simultaneously.

Very truly yours,

For the Secretary of State:
Dean Acheson
  1. Foreign Relations, 1943, China, p. 714.
  2. Director of the Office of Far Eastern Affairs; Adviser on Political Relations. August 1937 to January 1944.
  3. See memoranda of conversations by Mr. Hamilton on February 26, 1943; by Mr. Willoughby on May 7, 1943; by Mr. Hornbeck on March 10, 1943; and oral statement of the Department on May 6, 1943, Foreign Relations, 1943, China, pp. 710, 712, 769, and 711, respectively.
  4. Chinese Minister for Foreign Affairs.
  5. For telegram No. 99, see p. 1042.
  6. The three treaties deal with the termination of extraterritorial rights of these countries in China and were signed at Chungking in 1943. The British treaty was signed January 11, League of Nations Treaty Series, vol. ccv, p. 69; the Norwegian treaty, November 10, Overenskomster med Fremmede Stater … 1940–1945, p. 107, or The Chinese Year Book, 1944–45, p. 526; and the Belgian treaty, October 20, United Nations Treaty Series, vol. 14, p. 375.