The Consul General at Shanghai ( Davis ) to the Secretary of State
[Received October 2.]
Sir: I have the honor to enclose a memorandum34 regarding American Eights in Real Property in China, which is in amplification, but not modification, of the memorandum concerning Shanghai Consular Title Deeds which was forwarded by the Embassy to the Department by airmail despatch no. 1094 dated February 8, 1946.
The Department in its telegram no. 862 of May 17, 194635 approves the procedure set forth in the penultimate paragraph of the memorandum concerning Shanghai Consular Title Deeds, and the enclosed memorandum demonstrates that the same procedure is applicable to all real property owned by American nationals (including corporations or associations) in China, regardless of the nature or kind of the titles involved.
The enclosed memorandum discusses in its introduction the Chinese Land Law as it existed prior to the advent of extraterritoriality and then sets forth the nature of the rights and privileges which Americans were entitled to enjoy in China with reference to real estate according to the old treaties, after which the different kinds of titles held by Americans prior to the signing of the Sino-American Treaty of 1943 are mentioned and discussed.
The more important of these titles are Tien Tans, Perpetual Leases Issued to Missionaries, Consular Title Deeds, Declarations of Trust, Applications Pending before the War, and Land Ownership Certificates, and after discussing these titles in detail the author of the memorandum expresses the opinion that (1), American registered owners of land who are also the real and beneficial owners are the legal owners and possessed of the land to which the documents relate, and such owners are entitled to the benefits of Article IV of the Sino-American Treaty of 1943; (2) American beneficial owners who hold documents of title registered in the names of nationals other than Americans [Page 1331] (including corporations or associations), together with other satisfactory documentary proof, regardless of the type or kind, are the legal owners and possessed of the land to which the documents relate and such owners are entitled to the benefits of Article IV of the Sino-American Treaty of 1943; and (3), non-American beneficial owners whose property is registered in the names of American nationals (including corporations and associations) are not entitled to the benefits of the Sino-American Treaty of 1943.
The memorandum also construes Article II, paragraph 3, and Article IV of the Sino-American Treaty of 1943, the new Land Law, and explains why the conflicting clauses of the Sino-American Treaty of 1943 and the new Land Law are not in fact incompatible.
In conclusion the memorandum states, inter alia, that the legal theories and their application as demonstrated therein are “logical, consistent, and compatible with Article II, paragraph 3, and Article IV of the Sino-American Treaty of 1943.”