803.4061 Motion Pictures/5–1445: Telegram

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

777. Regarding question of 1945 remittances of American motion picture companies (ReDeptel 509, March 29, 4 p.m., and ReEmbtel 538, March 30, 9 a.m.) Embassy has recently held discussions with appropriate Finance Ministry officials and with representatives of U. S. companies. Latter expressed objection to arrangement proposed by Finance Ministry and requested Embassy to inform Ministry they preferred arrangement similar to that for 1944 with percentage of new receipts permitted to be remitted being reduced for [from?] 50 to 30%.

On May 5 chief of Monetary Section of Ministry’s Currency Dept stated to officers of Embassy that he was authorized by Finance Minister6 to make following statement which he requested be referred to representatives of U. S. companies.

Finance Ministry is willing to continue on same basis as for 1944 with new receipts to be remitted being changed from 50 to “around ten” percent. (Chief of Monetary Section states that, under 10 percent basis, amount to be remitted by all American companies would approximate U.S. $1,000,000 or twice the amount envisaged under CN $1.00 per ticket basis. Total amount remitted in 1944 was U.S. $2,250,360.24.)
Under arrangements now proposed, Central Bank, upon instructions of Finance Ministry, would readjust percentage of net receipts allowed distributors of American pictures whenever gross price of ticket is increased.
Finance Ministry raised questions whether (a) net receipts available for distribution between exhibitors and distributors could be revised, if necessary, once every 3 months and (b) whether, if such increases are made, they could be made simultaneously and at the same percentage rate of increase for all cities.

Regarding question of backlog of frozen funds now held in China in name of American companies, chief of Monetary Section stated that position of Finance Ministry remained unchanged.

Representatives of U.S. film companies have been advised of foregoing, which Embassy stated was being forwarded to Dept for possible reference to Hays Organization. Representatives requesting telegraphic instructions from their head offices.

  1. O. K. Yui.