The Counselor of Embassy in China (Smyth) to the Secretary of State

1069. Title deeds. Embassy handed note to FonOff May 2826 inviting attention to fact administrative procedure promulgated by Chinese Land Bureaus in connection replacement land documents seems to violate provisions article 4 of 1943 treaty; stating Embassy would be pleased discuss matter with FonOff; and requesting enforcement administrative procedure be suspended pending discussion between Embassy and FonOff; note reserved all rights granted by article 4.

On May 29 Embassy officer discussed matter with FonOff and suggested matter could be settled according to procedure authorized by Deptel 140, May 17. On June 4 Embassy officer delivered aide-mémoire26 to Dr. Wang Hua-cheng of FonOff which stated administrative procedure promulgated by Shanghai City Govt in 1945 and 1946 (see Shanghai despatches 3 and 5 of Nov 22 and Dec 7, 1945) seemed to conflict with article 4 in four particulars:

Issuing of certificate of other rights which is only 20 years lease according to article 449 of Chinese Civil Code instead of deed of ownership.
Charging of fees.
Fixing of time limit.
Sequestering of property, registration of which is not effected within prescribed period. Aide-mémoire also stated that in order settle matter in spirit amity and friendship, Embassy with approval State Dept suggested procedure set forth penultimate paragraph memorandum enclosed Embassy’s despatch 1004 [1094], Feb 8 be adopted.

June 12 Dr. Wang informally told officer of Embassy he had discussed matter with Chinese officials concerned and advised them to replace perpetual leases and other documentary evidence of title with deeds of ownership without charging fees of any sort. He expressed opinion matter would be settled in manner satisfactory to all parties concerned.

Officer of Embassy and of Shanghai Consulate conferred with Mayor Wu27 of Shanghai June 19. Mayor stated he was prepared agree to all American proposals with one exception (where land held by Americans outside areas set apart for foreigners in article 3 of 1903 treaty. Most such titles held on declarations of trust or liens issued by Chinese registered owners of land). Mayor contended such titles illegal and if transferred to American essential they pay fees. It was [Page 1328] pointed out to Mayor that Article 4 of 1943 treaty validated such titles and that American owners, although only holding land on declaration of trusts or liens were entitled to all benefits under article 4. Further pointed out to Mayor this is not local but national matter for settlement by Central Govt. Copy of Executive Yuan Order 7364 given to Mayor (Embassy despatch 518, July 2, 194528). In view of this order Embassy feels final settlement should be by national legislation.

Mayor finally agreed that, in view new land law promulgated April 29 this year, administrative regulations at Shanghai had lapsed.

Embassy confidentially informed that Legislative Yuan now drafting regulations to implement article 4 of 1943 treaty. Several members Legislative Yuan and FonOff are of opinion that article 4 will be strictly observed; that this is national matter, and that as implementing article 4 will be enacted.

Embassy will follow matter and believes satisfactory settlement will be made. In meantime we feel American title holders should await legislation before registering property.

Would appreciate Dept sending Embassy minutes of negotiations of article 4 of 1943 treaty by airmail.29

Sent Dept 1069, repeated Shanghai 433, June 30, 9 a.m.

  1. Not printed.
  2. Not printed.
  3. K. C. Wu.
  4. Foreign Relations, 1945, vol. vii, p. 1390.
  5. In instruction No. 7, August 2, the Department replied that no minutes had been recorded but it cited various drafts and memoranda of conversations pertinent to the point at issue.