793.943 Manchuria/5

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

No. 3382

Sir: I have the honor to enclose a copy of the Mukden Consul General’s despatch to the Legation No. 51 of February 16, 1935, in regard to the possible relinquishment by Japan of its extraterritorial rights in “Manchukuo”.

Mr. Ballantine expresses the belief that present developments indicate that the relinquishment by Japan of extraterritorial rights in “Manchukuo” will probably not be long delayed, and suggests the possible desirability under those circumstances of withdrawing American consular representatives from Manchuria.

The Legation is refraining from issuing instructions to the Consul General in this matter until it has received any comments the Department may care to make. In the Legation’s opinion, however, it is difficult to perceive how the relinquishment by Japan of extraterritorial rights in “Manchukuo”, even though coupled with an attempt by the “Manchukuo” authorities to assume jurisdiction over American nationals as anticipated by Mr. Ballantine, would warrant the withdrawal of American consular representatives. On the contrary, it would appear to the Legation that under those circumstances the services [Page 64] of American consular representatives would be even more necessary to the protection of American interests than at present.

In the somewhat analogous situation arising out of the treaty of annexation between Korea and Japan in 1910, American consular representatives appear to have continued to be of considerable service to American interests, particularly in relation to their property rights. (Foreign Relations of the United States 1910, pages 681 et seq., 1911, pages 320 et seq.)

The British Legation states that this question has not yet been raised by any of its consular representatives in Manchuria.

Respectfully yours,

For the Minister:
C. E. Gauss

Counselor of Legation
[Enclosure]

The Consul General at Mukden (Ballantine) to the Chargé in China (Gauss)

No. 51

Sir: I have the honor to enclose a clipping from the Manchuria Daily News of February 14, 1935,55 containing an announcement by the Japanese Embassy at Hsinking of the formation of a preparatory committee in Japan for the consideration of the relinquishment by that country of its extraterritorial rights in “Manchukuo”, together with a statement issued by the Foreign Office at Hsinking expressing its gratification over that action.

There is also enclosed a copy of an article which appeared in the same journal on February 15, 1935,55 purporting to be a Tokyo despatch to the Dairen Shimbun stating that the plan now being considered is to engage Japanese judges for the “Manchukuo” courts, to sit in cases involving Japanese, so that the abolition of extraterritoriality may be effected even before the “Manchukuo” judicial system has been perfected. It is further noted that the proposed budget for the “Manchukuo” Government for the next fiscal year contains an estimate for preparatory work for the abolition of extraterritoriality.

Developments are taking place so fast in this direction that the relinquishment by Japan of her extraterritorial rights will probably not be long delayed. As it is likely that when this happens “Manchukuo” may unilaterally declare the extraterritorial status of other nationals at an end, I venture to suggest that consideration must be given to the policy which our Government should follow in such an event.

[Page 65]

I presume that the United States could not acquiesce in any attempt on the part of the “Manchukuo” Government to assert jurisdiction over American citizens and their property so long as the “Manchukuo” Government is not recognized, since such acquiescence might immediately precipitate difficulties in connection with the maintenance of our extraterritorial rights in China. In other words, our attitude on this question would, in my opinion, be governed not by a consideration of the degree of judicial progress which has been attained in “Manchukuo”, but by the consideration of how our interests in China are affected.

In the event that the “Manchukuo” Government does in the future attempt to assert jurisdiction over American citizens, and protests by all means at our disposal are ineffectual, it would seem that the only course open would be to withdraw our consular representatives from Mukden and Harbin. I do not know how extensive American interests in Harbin are, but I foresee that, in Mukden at least, within a few years our interests will become greatly curtailed. Messrs. Andersen and Meyer, the principal American general importing firm, has already given up its branch here, the National City Bank have announced that they are closing theirs on May 31, and when the Petroleum Monopoly Law goes into effect, as it seems almost certain to do sooner or later, the Standard Vacuum Oil Company and the Texas Company will be out of business here.

With these firms eliminated, the remaining American interests, (other than agencies and minor offices in charge of Chinese or Russians) and the number of their American personnel, including members of their families will be as follows:

Name of American Interest American Personnel
Catholic Mission 31
American Presbyterian Mission 2
Seventh Day Adventist Mission 27
Assemblies of God Mission 3
Frazer Federal Inc. U. S. A. 2
Singer Sewing Machine Co. 1
Total 66

There are in addition 20 white Americans connected with non-American firms and organizations, 8 white Americans in miscellaneous employment, and 7 American citizens of the Japanese race, of whom all except one are connected with the “Manchukuo” Government.

Since effective consular protection could not be extended to the remaining American interests if extraterritoriality were unilaterally abolished in “Manchukuo”, there would be some justification to the view that it might be less detrimental to our interests to withdraw consular representatives than to have them remain.

Respectfully yours,

J. W. Ballantine
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