893.5034 Registration/4–2045: Telegram
The Chargé in China ( Briggs ) to the Secretary of State
[Received April 21—10:38 a.m.]
648. Representative of three American companies in Chungking called at Embassy last week to discuss the registration of foreign companies (ReEmbstel 221, February 15, 1 p.m. and previous correspondence) and to express some apprehension lest the new laws and regulations not be promulgated prior to June 30 next, the present deadline for filing registration applications and submitting documents. At their instance I sought an interview with the Minister of Economic Affairs who informed me as follows:
- Although the Chinese Government is actively engaged in the study of registration in the premises including drafts prepared by Judge Helmick, Wong said it is doubtful whether legislation will be enacted prior to June 30.
- The Chinese Government is not prepared to grant a further extension of time for filing applications.
- The Government therefore desires that foreign firms effect registration under existing legislation. Wong indicated however that the Government would not insist on compliance with all provisions of existing legislation. He mentioned for example that lists of shareholders would not be required, but in reply to a suggestion that it would be helpful to have outlined detailed procedure, he referred to his memorandum to the Embassy on June 23, 1944 (translation forwarded as enclosure to despatch 2752, July 8, 194415).
At a further meeting with the representatives of the three companies (Standard-Vacuum Oil, William Hunt and Shanghai Evening Post and Mercury) I described the conversation with the Minister and it was tentatively agreed, subject to obtaining approval from their respective home offices, that an application in draft form would be prepared by one of the companies for the Embassy to use in a [Page 1211] further informal discussion with the Minister, with a view to eliciting from him a statement as to its sufficiency. I understand that this procedure will be satisfactory to Wong, and that William Hunt and Company is prepared, if authorized by the head office, to make available its documents (which must be submitted in Chinese).
It was also agreed at this meeting that the foregoing information would be cabled by the representatives to their principals and by the Embassy to the Department as a basis for probable further discussion with the companies concerned or with the National Foreign Trade Council.
For the confidential information of the Department:
From reliable sources I understand that the Chinese Government is in fact making progress in its study of the draft legislation and that there is much interest in the principles advocated by Judge Helmick, which may however be somewhat modified. In so far as I could judge during my conversation with Dr. Wong, his attitude was by no means unfriendly to American or foreign business in general but it is nevertheless apparent that the Chinese Government proposes to exercise a considerable measure of control over their operations, now that extraterritorial rights no longer exist.
Having in mind the complexity and legal nature of the problem, I do not feel that the Embassy should directly influence the companies’ decision whether or not to file application under existing legislation.
The suggestion of submitting an application in blank was made with a view to clarifying the Minister’s attitude in the premises and also because I am of the opinion that to do nothing between now and June 30 and for the companies then to refuse to register might prejudice them in the eyes of the Chinese Government.
There are of course many more than three American companies involved, but the representatives calling on me stated that all of the others are currently represented by other than American citizens (some being Chinese and Indians) and they have therefore been reluctant to wave an open forum with them regarding the problem.
The question of possible relevance of the proposed commercial treaty16 to this situation was also raised in discussion with the American representatives, but I informed them that generally speaking this instrument provides for the most-favored-nations treatment, and that specifically it would provide for the functioning of foreign companies “in conformity with the applicable Chinese laws and regulations,” present or future.