893.515/5–1349: Telegram
The Consul General at Peiping (Clubb) to the Secretary of State
[Received May 14—1:31 p. m.]
835. ReEmbtel 964, May 8, to Department. Order Peiping Military Control Committee implementing Article 7 Regulations Governing Foreign Exchange and directing exchange or deposit foreign currencies and foreign exchange issued only May 4, time limit May 10.
Consul[s] Peiping discussed matter two meetings. In end some offices deposited certain sums as token but held back full deposit. British made no deposit. Italians made first move asking deposit in name his office. Was informed I had deposited in own name (quite untrue but bank may have confused deposit made by DALS76 commandant). He may have deposited all funds. French and Dutch were permitted deposit in names their offices without question but by report responsible bank official later got tongue lashing from Communist representative regarding at least French deposit. When representative this office May 10 asked bank whether deposit American Government funds could be made in name consular bank manager, after matter was submitted Communist commissar back room, orally stated such deposit unacceptable, but deposit in name individual acceptable. Office only exchanged enough currency May 10 to reduce somewhat holdings and to meet anticipated needs near future, and I of course made no deposit official funds in own name.
Note MCC regulations as issued Peiping applied “Chinese and foreign persons” but made no reference either business firms or official organs. By letter law in short it would seem inapplicable organs foreign government. In light all circumstances, addressed letter May 11 to bank which referred bank’s refusal accept deposit in name Consulate and asked be informed whether (1) detailed regulations had any reference to official organs foreign governments located Peiping; (2) if so, what provisions and procedure had been fixed for handling such official funds. I remarked it would, of course, be illegal for myself for [or] other officer this consulate to dispose of official Government funds other than according American law and regulations, and that I should have asked instructions my Government in circumstances where other disposition contemplated. Letter was put in official form. [Page 773] Per precedent it should remain unanswered. Note that Article 8, April 7 regulations provides generally that term foreign exchange certificates is limited to 40 days, that “remittances from abroad” are excepted, but that Bank of China “at time of need” may purchase foreign exchange deposits at counter rate prior to expiry time limit “in order adjust market requirements”. In view various uncertainties and insecurities attached to making such deposits and with particular reference Note One Section 5–9 and Section 5–11 Foreign Service Regulations and Deptel 247, April 29,77 request specific instruction whether authorized, in case Communist authorities hold rule applicable official consular funds, deposit such funds in Bank of China for future exchange and withdrawal, in name Consulate. Would request authorization in any event, however, refrain or refuse delivery over of official funds at my discretion.
My reasoning this connection would be that although government prohibition use foreign currency within its boundaries would of course apply consular establishments, it would be contrary at least to accepted international practice to cause organ friendly government turnover official funds which latter was prepared freeze, and [any?] more than to require handing over by that organ of official funds in local currency into custody some state institution. Note Embassy circular telegrams August 23, 6 p. m., and September 12, 12 noon in like circumstances envisaged no delivery over to Nationalist Government official funds, in fact reported acquiescence that Government continued operation PX commissary system on closed dollar circuit. This office has ceased all salary payments in US currency. Believe any Communist move affecting American official funds, as distinct from control their market circulation, should be resisted.
Report on administrative aspects matter as raised Embassy’s reference telegram to follow.78
Sent Department 835; repeated Nanking 531, OffEmb Canton 113, Shanghai 556.