The Consul General at Shanghai ( Josselyn ) to the Secretary of State

No. 80

Sir: I have the honor to refer to my telegram no. 128, dated January 29, a [2] p.m.14 concerning the exchange of Consular Title Deeds for “Certificates of Other Rights.”

In accordance with the statement made in the last paragraph of this telegram, I am forwarding to you herewith the following documents:15 (1) Memorandum of Conversation concerning Consular Title Deeds in Shanghai; (2) Copy of form for new “Deed of Ownership” together with translation; (3) Copy of Form for “Certificate of Other Rights.”

R. T. Bryan, Jr. will prepare and forward to you a memorandum on the legal aspects of this matter when he arrives in Chungking.

Respectfully yours,

Paul R. Josselyn
[Page 1317]

Memorandum of Conversation, by Mr. Robert T. Bryan, Jr., Special Assistant to the Embassy in China

At 11 a.m. on January 28, 1946 Paul R. Josselyn and R. T. Bryan, Jr. called by appointment on T. K. Ho, Deputy Mayor of Shanghai to discuss the re-registration of consular title deeds or perpetual leases as more fully specified in Article IV of the new Sino-American Treaty.

Article IV of the treaty was called to the Deputy Mayor’s attention. For ready reference, Article IV is quoted hereunder:

[Here follows text of article IV.]

It was pointed out that according to Anglo-Saxon law the legal title remained in the trustee, in this case the registered owner, not in the beneficial owner. Chinese law, however, made the trustee only the agent of the beneficial owner. The United States Government was interested in registered owners who were also beneficial owners; it was not interested in registered owners who were only the trustees of the beneficial owners.

A copy of a “Certificate of Other Rights” was shown to the Deputy Mayor, and he was informed that this was not a deed of ownership within the purview of the words “by new deeds of ownership”. The words “other rights” clearly indicated that the document was not a deed of ownership. If such a document was given to the holders of Consular Title Deeds, it would cause the property to immediately decline in value. For ready reference a copy of the “Certificate of Other Rights” together with a translation is attached.

A copy of the proposed new “Deed of Ownership” was then shown to the Deputy Mayor who was informed that this was the deed of ownership which should be issued by the Chinese Government to Americans in exchange for their Consular Title Deeds. The Deputy Mayor then explained that this new deed was to be issued to property owners in exchange for the old Tu Di Tswng. It was suggested to the Deputy Mayor that there should be no discrimination between Chinese owners and holders of Consular Title Deeds. The same type of deed should be issued to both Chinese and Americans. For ready reference, a copy of the new “Deed of Ownership”, together with a translation is attached.

It was stated that the Chinese Land Law would have to be amended in order to permit the issuance of “Deeds of Ownership” to Americans. This might cause some delay.

It was suggested that this matter could be satisfactorily settled in one of three ways: first, new deeds of ownership could be issued to [Page 1318] Americans in exchange for their Consular Title Deeds; or second, Consular Title Deeds could be validated by making a note on them to that effect; or third, an order could be issued validating all Consular Title Deeds. It was explained that the first method was cumbersome and that either the second or third methods would be satisfactory to all parties concerned.

It was called to the Deputy Mayor’s attention that the treaty said nothing concerning a time limit within which Consular Title Deeds should be exchanged for new documents. The time limit had already been extended to March 18, 1946, but even this extension granted entirely too short a period within which to enable the holders of Consular Title Deeds to exchange them for new documents. It was claimed that the minimum period allowed for the exchange should be at least five years.

The Deputy Mayor agreed that, in accordance with the terms of the treaty, no fees should be charged. He further agreed, in principle, with the suggestions made by Messrs. Josselyn and Bryan as above stated. Finally he pointed out that Americans should not worry about the time limit but should wait until the whole matter was settled. He felt that this was a question which could be settled satisfactorily by cooperation between the United States and China.

The conference then ended at 11:45 having been conducted all the way through in a spirit of friendship and amity.

  1. Not printed.
  2. Enclosures 2 and 3 not printed.