893.5064/8–1044

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

No. 2857

Sir: I have the honor to refer to the Department’s air mail instruction no. 647, May 16, 1944, enclosing a copy of a memorandum entitled “Life Insurance in China”39 by Mr. Mansfield Freeman, President of the United States Life Insurance Company, and suggesting that copies thereof be brought to the attention of the appropriate Chinese officials as representative of the views held by American companies interested in the insurance business in China.

[Page 1065]

Copies of the memorandum were brought informally to the attention of Dr. Wang Chung-hui, Secretary General of the Supreme National Defense Council and chairman of the Legislative Technical Commission of that Council; Dr. Hsu K’an, Minister of Food and chairman of the Financial Technical Commission of the Supreme National Defense Council; Mr. K. P. Chen, chairman of the Economic Planning Commission of the Central Planning Board and president of the Shanghai Commercial and Savings Bank which, in conjunction with British interests, operates the China Life Assurance Company, Ltd., and Mr. P. N. Chung, general manager of the Central Trust Company, a subsidiary of the Government-owned Central Bank of China which operates an insurance department interested in fire and marine insurance. The Embassy ascertained that the foregoing were either directly responsible for the drafting of legislation for post-war control of insurance enterprises or in a position to influence those charged with that task.

On June 24, 1944, the Chinese adviser to the Hong Kong & Shanghai Banking Corporation, Chungking, stated in strict confidence to an officer of the Embassy that the Financial Technical Commission of the Supreme National Defense Council was considering a proposal to prohibit foreign companies in the post-war period from engaging in life insurance, sickness insurance and insurance covering transportation in China. Attempts were made without success to obtain confirmation of this report from such representative individuals as Mr. K. P. Chen, Mr. P. N. Chung, and others.

In order to obtain definite information regarding the reported proposal, an officer of the Embassy called on August 7, 1944, on Dr. Hsu K’an, chairman of the Financial Technical Commission. Dr. Hsu stated that he had not previously heard of any such proposal and that his Commission had not previously and was not then considering such a proposal.

In spite of Dr. Hsu’s statements, it is believed possible that certain younger Chinese officials with ultra-nationalistic views regarding the post-war position for foreign enterprises in China have put forth a proposal along the lines indicated. Some good may have been accomplished by the Embassy’s referring to appropriate Chinese officials and business men copies of the memorandum on “Life Insurance in China” as it contains arguments which might be used by the more mature and less reactionary Chinese officials to restrain those who favor the enactment of legislation which would be restrictive or discriminatory to foreign insurance business in China.

Officers of the Embassy are continuing to discuss this and related matters with Chinese officials in the hope that more liberal and realistic [Page 1066] business control policies may eventually find favor with the Chinese Government. Meanwhile we respectfully reiterate the opinion expressed in our telegrams 1235, July 18, 10 a.m.,40 and 1303, July 28, 11 a.m., that interested American business groups in the United States should take advantage of Dr. H. H. Kung’s presence there to impress upon him the adverse effects upon China which may result from the formulation of too nationalistic and restrictive business controls by the Chinese Government.

Memoranda such as that on “Life Insurance in China” are very useful to the Embassy in informal discussions of post-war problems with interested Chinese. Where copies are transmitted or handed to interested Chinese, they are indicated as representing the views of American business interests, and the copies are furnished on an informal, unofficial basis. Dr. Wang Chung-hui, Secretary General of the, Supreme National Defense Council and Chairman of the Legislative Technical Commission of that Council, in speaking to me of two memoranda sent to him unofficially, expressed his appreciation of my thoughtfulness in sending them to him and invited me to let him have anything further I may receive. He stated that it is useful to the Chinese side to have the reactions of American business interests on proposals for post-war China.

Unfortunately, however, the Chinese are most secretive in their post-war plans, and it requires constant vigilance to ascertain what is transpiring behind the scenes.

I believe that such organizations as the National Foreign Trade Council and the Chinese-American Council on Commerce and Industry should be encouraged to present thoughtfully prepared memoranda setting out their views; memoranda which can be used by the Embassy as representing the views of various business groups in the United States.

Respectfully yours,

C. E. Gauss
  1. Neither printed.
  2. Ante, p. 994.