494.11/108: Telegram
The Secretary of State to the Consul General at Shanghai (Lockhart)
480. Your 1037, November 25, 10 a.m.,2 and 1084, December 6, 6 p.m. It appears that the proposal of Japanese military authorities contemplates an offer to settle certain claims on the basis of an amount which in each case admittedly represents merely a percentage of the estimated amount of losses which estimate is made by military authorities in disregard of any evidence which may be submitted by a claimant to establish the actual value and quantity of property lost, and that the amount so estimated will be paid in greatly depreciated Chinese currency. It further appears that such action is contemplated [Page 417] even in cases in which the loss is the direct result of acts of Japanese military authorities not in the course of military operations.
It is suggested that unless you perceive objection Vice Consul Tenney informally advise the Japanese consular officer who made the approach that such a method of computing the amount to be paid in settlement of an international claim is believed to be unprecedented and that consequently since the Consulate General desires to disassociate itself entirely from any negotiations between Japanese authorities and American claimants which have for their purpose the settlement of claims on any such basis, it is not in a position to transmit the proposed offers to claimants. He may add that if the Japanese authorities endeavor to negotiate directly with American claimants it should be on the understanding that the claimants may accept or reject any offers which may be made and on the further understanding that if settlements are not effected as a result of such negotiations, this Government reserves the right to present through diplomatic channels in appropriate cases formal claims for the full amount of losses actually sustained, irrespective of amounts offered by Japanese authorities or counterproposals made by individual claimants in the course of such direct negotiations.
In the event that direct offers are made to individual claimants and they seek your advice, it is suggested that they be advised that they are free, if they so desire, to negotiate with Japanese authorities on the understandings set forth in the preceding sentence. They may also be advised that if their losses were the direct result of acts of Japanese forces not in the course of military operations, which, it is understood, are the only classes of cases included in the Japanese proposal, claimants are, in the Department’s opinion, entitled to the full value of the property lost or destroyed. However, in determining whether they will accept or reject offers of partial compensation, claimants should take into consideration the question whether they possess or are likely to obtain competent evidence establishing that losses were sustained under the conditions stated above.
Bearing in mind the situation outlined in your telegrams under reference and the desirability of there being adopted by American claimants a common attitude in so far as may be consistent with their individual interests, the Department desires that, unless you perceive substantial objection, you suggest to American claimants, either directly or through appropriate American organizations, that it is believed that a useful purpose would be served if American claimants at Shanghai were to set up a special consultative group which, although permitting freedom of individual action, would nevertheless, in the interests of all concerned, offer advice to and coordinate the [Page 418] efforts of those Americans who are seeking compensation for losses sustained as a result of the existing hostilities in China.
The Department desires that Peiping issue to such offices in China as are handling any considerable number of American claims appropriate instructions in the sense of the preceding paragraph.
Sent to Shanghai. Repeated to Chungking, Peiping, and Hankow. Shanghai please repeat to Tokyo.
- Not printed.↩