The Consul General at Dairen ( Benninghoff ) to the Chargé in China ( Robertson )22

[No. 5]

Sir: I have the honor to submit herewith, in separate paragraphs on several subjects, the substance of a conversation held on May 9, 1946 at my request with Lieutenant General G. K. Kosloff, Soviet Commander of Dairen.

The two most important developments of the conversation were (a) the General’s clear cut statements that Dairen was not yet a free port and that only American merchant ships bringing diplomatic and consular mail and personnel could enter; and (b) the General’s lack of understanding of the legal principle whereby the Japanese Army could purchase American enemy property and deposit the proceeds in [Page 1171] a frozen account in the name of an enemy corporation. The General felt that the Japanese could only regard enemy property as booty and therefore could not pay for it, even into a frozen account.

The Embassy will note that during the discussion of these problems in which the United States is vitally interested, I made no attempt to discuss or argue the interpretation of the Treaty, or the legal principle involved; I merely desired to obtain the General’s viewpoint regarding those questions. I endeavored, and I hope succeeded, in expressing my understanding of the General’s position without committing my government to an acceptance thereof. Being entirely without instructions in these and other matters, and being without information concerning negotiations (or the lack of them) between our two Governments, and also being unable either to communicate the General’s viewpoint to my superiors or to receive instructions in regard to the attitude I should adopt, I felt that I was not in position to take a more positive stand. I trust that under the circumstances the Embassy will approve.

Communications and Courier Service

After a good deal of discussion regarding his statements at our previous discussion concerning the entry of American ships with couriers, the General made it clear that an American merchant ship coming to Dairen for the sole purpose of bringing a diplomatic courier and official personnel would be permitted to enter provided it followed the same procedure of notification adopted by the Chech Knot. In reply to a direct question, and after quite a long harangue which the interpreter did not translate completely, the General stated that the port was not open to the unrestricted entry of American vessels. He referred to the reasons therefor as explained at length in our previous conversation (of April 15), but he did not state specifically the steps by which the port would or could be opened.

(The General had previously stated that the port was under Soviet military restrictions under the provisions of the Treaty with China, by virtue of which Soviet military regulations were in force during the existence of war with Japan, a condition which still existed.)

The General did state, however, that the question of the arrival of a ship bringing a courier was quite different from that of opening of the port, and that the latter step was one for the Governments concerned. He was evasive when I asked him which Governments. (I have the feeling that when the port is declared open, it will still be necessary for the United States to negotiate with the Russians regarding the terms under which American ships will be permitted to enter. In other words, although China and the USSR might declare the port open, the conditions of trade will still have to be negotiated at the government level.)

[Page 1172]

Protection of American Property

I gave the General the letter (copy enclosed)23 I had prepared concerning American property in Dairen, so far as I was aware. He said that he would study the matter and get in touch with me later. With reference to the properties of the two oil companies, I tried to explain that after the war started, in February or March 1942, the Japanese had sold the property to the Japanese Army under the provisions of their Enemy Assets Control Law and had deposited the funds derived thereby into frozen accounts in the Yokohama Specie Bank. The General had difficulty in understanding this procedure, as according to him, the Japanese regarded American property as booty and therefore could not pay for such to enemy firms. He was puzzled by the whole affair and promised to look into it. I had some difficulty in persuading him that my letter was for his information only and that I was not attempting to solve the legal problems involved, as that would necessitate the presence of representatives of the firms and probably governmental negotiations. The General said that he would look into the whole matter and get in touch with me at a later date.

Opening of Mail Service with China

I told the General that I had heard that the postoffice was accepting mail for various places in China, especially Tientsin, Tsingtao and Shanghai, and asked whether the service would soon be extended to telegraphs. The General expressed some surprise that such mail was being accepted and said he knew nothing about it. He had no information about telegraphic messages. He made a slip, however, in disclaiming knowledge of the new postal service, as he did say that he had heard that this office was trying to send mail through the postoffice. (If he had heard that much, he must have known at least about the new service. The postoffices are open and have accepted official and personal mail from this office.)

Repatriation of Japanese

I told the General for his information that a number of Japanese had called on me and had expressed a desire for their repatriation to their own country, and that my reply had always been that that was a matter with which I was not concerned and on which I had no information. The General said that the problem was one for the governments concerned to discuss and that he could only proceed according to his instructions. I again said that I was merely attempting to inform him of my attitude to the question, to which he replied that he could not of course control my conversations with my callers.

[Page 1173]

Regulations and Orders of the Commandant

The General agreed to supply me with copies of the various orders which had been issued by the Soviet Command in Dairen since the beginning of their occupation. They will be in the Russian, Chinese, or Japanese languages.

Respectfully yours,

H. Merrell Benninghoff
  1. Copy transmitted to the Department by the Embassy in China without covering despatch; received about June 25.
  2. Not printed.