Memorandum of Conversation, by the Deputy Director of the Office of Far Eastern Affairs (Stanton)

Participants: Sir George Sansom8
Mr. Ballantine
Mr. Stanton

Sir George Sansom called at his request and during the course of conversation handed to Mr. Ballantine the attached paper9 concerning various problems which will arise in connection with the relinquishment of extraterritorial rights and the undertaking by the Chinese Government to assume liabilities and responsibilities of the municipal councils at Shanghai and Kulangsu, Amoy. The problems specifically mentioned by Sir George were the foreign-owned public utilities operating in those cities under franchise or by agreement with the municipal councils mentioned and the public trusts formed by the municipal councils to provide security for holders of municipal debentures and employees entitled to pensions from the councils.

Sir George indicated that the British Foreign Office had originally favored the establishment of an Anglo-Chinese commission to consider and resolve these problems in so far as they affected British interests but that he understood the Foreign Office was now prepared to proceed through the usual diplomatic channels or to utilize any effective medium. He inquired whether these problems were under consideration in the Department and was informed that we had given the matter some thought and felt that it would be desirable for us to formulate our views in regard to these problems in the near future. Sir George was also informed that we had instructed our Embassy at Chungking to make informal oral inquiry of the Chinese Minister of Foreign Affairs in regard to measures which the Chinese Government contemplated taking with a view to implementing the obligations [Page 1390] assumed by the Chinese Government under Articles II and III of the Treaty for the Relinquishment of Extraterritorial Rights and that Dr. Soong’s reaction had been that while the Chinese Government is of course prepared to carry out its obligations he felt this matter would have to wait until the reoccupation of Shanghai and other areas.

  1. British Minister in the United States.
  2. Not printed.