893.5034 Registration/9–345: Telegram

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

1507. At a meeting on August 29th the substance of Department’s telegram 1331 August 25th, 2 p.m., was conveyed to Dr. Sun Fo, President of the Legislative Yuan, and to Dr. Chang Chao-yuan, member of the Legislative Drafting Committee, as expressive of the preliminary views of representative American business groups concerning the provisions of the Draft Corporation Law. Attending this meeting with Messrs. Robertson and Walker48 was Dr. George Sellett, Honorary Legal Advisor to the China–America Council of Commerce and Industry.

It had been understood by the Embassy that final consideration of the Draft Corporation Law was to be given by the Legislative Yuan on August 30 or 31. Mr. Robertson explained that in responding to [Page 1234] Dr. Sun’s invitation for their comments, neither the Departments of State or Commerce nor American business groups had had sufficient time to formulate their views in detail [on?] these circumstances, and because initial study of the draft law appeared to have raised serious questions with respect to many of its provisions, the hope was expressed that final action on the law might be delayed until these official views and more complete comments could be fully submitted for consideration by the Legislative Yuan.

A number of points concerning the draft law were discussed at length with Dr. Sun and Dr. Chang with a view to making clear that in many respects the law as it now stands may not be one which would attract American trade and investment in and with China.

Although the August 29 meeting was concluded without a definite decision from Dr. Sun, on September 2 the Embassy learned that only chapters 1 and 2 of the draft law passed their second readings in the Legislative Yuan on August 31, and that the remaining chapters would not come up for second reading until September 14. It is expected that the whole law will come up for its third reading and final passage a few days after that date.

Referring to final paragraph Department’s telegram 1331, August 25, 2 p.m., it appears doubtful that the more detailed views of business groups and the Department’s comments thereupon will arrive by air-gram in time for consideration. As we feel certain that there will be further delay in final enactment of this law, it is requested that a statement of the views of the Department of State and/or Commerce regarding this law be forwarded by telegram at the earliest possible date.

Hurley
  1. Assistant Commercial Attaché Melville H. Walker.