Foreign Relations of the United States Diplomatic Papers, 1934, The Far East, Volume III

493.11/1824: Telegram

The Secretary of State to the Minister in China (Johnson)

Washington, February 16, 1934—5 p.m.

41. Your telegram No. 47, January 20, 9 a.m., and despatch No. 2424, December 20, 1933.⁹⁷ Department requests that you review carefully its previous instruction in regard to proposed claims commission, particularly first two paragraphs of its telegram No. 8 of January 11, 1933, 11 a.m.⁹⁸ and that thereafter you make known to the Chinese Government, both orally and in writing, (1) that the reason stated by the Chinese Government for refusing to accede to the request of this Government for the establishment of a Sino-American claims commission, namely, the creation of a precedent, is, in the opinion of the Department, wholly inadequate; (2) that the Commission for Adjustment of Domestic and Foreign Obligations, although ample opportunity has been afforded and much time elapsed has failed to effect even the adjudication of American claims and that the Department does not perceive in what manner the setting up within such commission of a separate department, as suggested by Dr. Kung, would per se remedy the situation (the Legation should bear in mind that such a procedure would automatically withhold from American claimants an impartial review of their cases); (3) that the Department considers as inappropriate and impracticable the second alternative suggested by the Chinese Government to the effect that the adjustment of outstanding obligations be discussed under the cloak of a possible American loan to China (the Legation should bear in mind that such a step, even if acceptable to this Government, would in all probability create far greater resentment in Japan than would the creation of a Sino-American claims commission against which, it is believed, no reasonable objection could be raised by other Powers).

You may also point out to the Chinese Government in reply to its contention that the Japanese Government, if accorded the facility of a Sino-Japanese claims commission, would in all probability attempt to bring up doubtful financial transactions, that the constitution of a commission similar to that contemplated by the American proposal would make it possible to render such an attempt ineffective because the Chinese and neutral assessors, who would hold the controlling votes, could decide against or refuse to consider such claims as are without support in law or equity.

As previously indicated the Department considers this matter as one of urgency and of great importance and desires that the Legation promptly and assiduously press the Chinese Government for a favorable reply to the American Government’s request for the establishment of a Sino-American claims commission.

Hull

97. See footnote 90, p. 542.
98. Foreign Relations, 1933, vol. iii, p. 628.