Subject: Liquidation Commission of the Former International
Settlement at Shanghai: Country Hospital, Shanghai General Hospital and
Victoria Nurses Home.
It will be noted that under the proposed plan Chinese authorities will
relinquish all claims to the Country Hospital; that the Shanghai General
Hospital is to be operated in the future under a revised trust deed whereby
the foreign community will be represented on the Board of Governors; and,
that one or two floors of the Victoria Nurses Home will be set aside for the
residence of nurses of the Country Hospital. Since the letter was written
the matter has been further explored and the Foreign Advisers and this
Consulate General are convinced that the settlement as outlined is the best
that could be made under present conditions at Shanghai. However, before
agreeing to this settlement the Consulate General would welcome any comments
that the Embassy and Department might care to make on the subject.
[Enclosure]
The American Adviser to the Liquidation Commission for
the International Settlement at Shanghai (Sellett) to
the Consul General at Shanghai (Davis)
Dear Mr. Davis:
Liquidation Commission: Country Hospital, Shanghai General Hospital and
Victoria Nurses Home.
The Second Sub-committee of the Commission for the Liquidation of
Official Assets, Obligations and Liabilities of the former International
Settlement at Shanghai deals with all problems of the Commission
excepting the claims of ex-employees of the former Shanghai Municipal
Council. The Second Sub-committee has considered at great length the
status of the Country Hospital, the Shanghai General Hospital and the
Victoria Nurses Home, but agreement on these properties has not been
reached. A majority of the members of this Sub-committee are Chinese.
Mr. Jeffery of the British Consulate and I are the foreign members.
Dr. Y. J. Cieh of the Bureau of Public Health has been serving on the
Second Sub-committee as proxy for Dr. Chang Wei, Commissioner of Public
Health. Yesterday Dr. Cieh came to my office and told me that he was
authorized to make the following proposals:
Country Hospital—The Chinese Government will relinquish all
claims to the Country Hospital and the foreign community of
Shanghai can have complete control thereof.
Shanghai General Hospital—The trust deed shall be revised to
provide that the nine members of the Board of Governors shall be
designated as follows: six (possibly five) by the Shanghai
Municipal Government and City Council and three (possibly four)
by the foreign community of Shanghai. The trustees of the
property shall be designated by the Board of Governors.
Victoria Nurses Home—One floor (possibly two floors) shall be
used for the accommodation of nurses of the Country Hospital.
The remainder of the building shall be at the disposal of the
Chinese Government.
Dr. Cieh did not mention the source of his authority, but stated that the
foregoing proposals would be carried out by the Chinese Government if
acceptable to the foreign advisers of the Liquidation Commission. In
that event he desired me to draft the necessary resolutions, in such
form as I would consider appropriate, and deliver them to him. The
resolutions would then be dealt with as originating with the Chinese
members of the Sub-committee and he would present and move the adoption
of the resolutions. I did not express my views regarding Dr. Cieh’s
proposals but told him that they would receive
[Page 1409]
consideration and I would discuss the matter with
him within a few days.
Throughout the discussions in the Second Sub-committee Mr. Jeffrey and I
took the position that the Country Hospital and the General Hospital are
charitable trusts and are not official assets of the former
International Settlement. With respect to the Victoria Nurses Home, we
expressed the opinion that while being an official asset of the former
International Settlement, it was dedicated as a home for foreign and
Chinese nurses and there was an obligation on the part of the Chinese
Government to use it for that purpose. From time to time we indicated a
willingness to compromise, but no reasonable basis for compromise
appeared attainable.
The Country Hospital was established by a deed of gift dated March 31,
1926. The donor, Mr. Charles Ernest Rayner, is an American citizen now
residing at Santa Barbara, California. The General Hospital was
established by a trust deed dated July 30, 1878. Prior to that date the
General Hospital had been operated as a business enterprise owned by
shareholders. In the altered circumstances brought about by the Treaties
abolishing extraterritoriality3 the deeds
do not now provide a workable basis for control and operation of these
hospitals. This results principally from the methods provided for in the
deeds for the selection of the boards of governors for these hospitals.
In the case of the Country Hospital it is quite clear from the deed of
gift that the donor intended that the hospital should be used for the
benefit of the foreign residents in and around Shanghai and that the
hospital should be controlled and managed by foreigners. Similar
intentions are disclosed by the trust deed of the General Hospital. Both
are charitable trusts and it would not be difficult to revise the deeds
so as to make it possible to carry out the wishes and intentions of the
original donors. Neither of these hospitals was ever included in the
balance sheet of the former Shanghai Municipal Council as an asset of
the Council.
Sir Allan Mossop, former Judge of H. B. M. Supreme Court for China, has
given consideration to the legal problem arising out of the deed of gift
of the Country Hospital and the trust deed of the General Hospital in
the changed political situation resulting from the relinquishment
Treaties. I believe it is his view that the Shanghai Municipal
Government, as the successor to the Shanghai Municipal Council, stands
in the position of the former S. M. C. with respect to these hospitals,
e. g. where the S. M. C. had the right to designate a certain
[Page 1410]
number of governors, that
right has now passed to the Shanghai Municipal Government. It is my
opinion that neither the Shanghai Municipal Government nor any other
Chinese government or Chinese non-governmental organization succeeded to
this right. These deeds disclose a very clear intention on the part of
the donors that these hospitals shall be for the use of this foreign
community and shall be controlled and managed by foreigners. If the view
is taken that in the changed political situation the right to designate
governors passed to the Chinese Government or to other Chinese
organizations the clearly expressed intentions and purposes of the
donors would be defeated because these hospitals for the use of
foreigners would then be controlled and managed by Chinese. These are
charitable trusts and under American and British law as well as under
Chinese law the original legitimate intentions of the donors should be
carried out and the necessary revisions in the deeds should be made to
accomplish that end.
The Victoria Nurses Home at 23 Chung Cheng Road, Western (formerly Great
Western Road) presents a more difficult problem. The claims of the
foreign community to this institution are not very strong. In 1897 a
committee of British residents of Shanghai raised the sum of Taels
420,000.00 by public subscription for the purpose of providing a
memorial of Queen Victoria’s Diamond Jubilee. Subscriptions were mainly
British, but included other foreign nationals. These funds were used to
erect a building on land owned by the S. M. C. near Range Road. Upon
completion the building was formally delivered to the S. M. C. and named
the Victoria Nursing Institute (later Victoria Nursing Home). Thereafter
additions were made to the Victoria Nursing Home by the S. M. C. In
1928, as a measure of economy, the Victoria Nursing Home was closed. A
few years later the present Victoria Nurses Home was built on land
adjacent to the Country Hospital. At the formal opening of the Victoria
Nurses Home in 1933 the Chairman of the S. M. C. declared: “The Council
in 1927, upon the recommendation of the Municipal Economy Committee,
decided to close the Victoria Nursing Home, Range Road, on January 1st,
1928. As the Victoria Nursing Home was built in 1901 by public
subscription on municipal land in commemoration of Queen Victoria’s
Diamond Jubilee, the Council decided to perpetuate the memorial in the
form of a home for nurses.” The cost of the new Victoria Nurses Home was
undoubtedly many times the sum provided by the Diamond Jubilee
Committee.
Following V–J Day the British Red Cross occupied the Country Hospital and
some months later turned it over to the control of members of the
Hospital’s last Board of Governors. Consequently, the
[Page 1411]
Country Hospital is now under the
control of foreigners acting for the foreign community of Shanghai.
Immediately after V–J Day the General Hospital was taken over by the
Shanghai Municipal Government from the Japanese. Early in 1946 a
Provisional Board of Governors was set up for the General Hospital. The
Chinese invited several foreigners to join the Provisional Board, but a
majority of the members are Chinese. The Shanghai Municipal Government
took possession of the Victoria Nurses Home shortly after V–J Day. At
the present time it is being used as a dental clinic, a hospital for
special maternity cases and a tuberculosis hospital.
In the Second Sub-committee discussions the Chinese members took the
position that the two hospitals and the Victoria Nurses Home are
official assets of the former International Settlement to be transferred
to the Chinese Government. They indicated a willingness to have a board
of governors for each of the two hospitals, a minority of the governors
to be designated by the foreign community of Shanghai. As to the
Victoria Nurses Home, the Chinese members appeared willing to allocate
two floors, or possibly three, for the use of Chinese and foreign nurses
without a binding undertaking that any specific portion of the allocated
space would be available for the accommodation of nurses of the Country
Hospital.
In my opinion the proposals made by Dr. Cieh yesterday present a basis
for compromise which should be considered acceptable by the foreign
community of Shanghai. It would give to the foreign community complete
control and management of the Country Hospital as intended by Mr.
Rayner, the donor. It is probable that the foreign community of Shanghai
will be able financially to support the Country Hospital. The General
Hospital is already under the control of the Shanghai Municipal
Government. Sir Robert Calder Marshall, Mr. John Keswick and I are the
foreign members of its Provisional Board of Governors. After more than a
year’s experience with the problems of the General Hospital I believe
that a minority of foreigners on its Board of Governors will have no
marked influence on the policies of operation and management. Some
provision could probably be made to reasonably insure that a substantial
portion of the facilities of the hospital will be available for the
accommodation of foreigners. For some decades past the General Hospital
was dealt with in considerable measure as if it were a municipal
hospital. The S. M. C. provided the funds, or guaranteed the repayment
of borrowed moneys, necessary for the large expansion of the hospital
and to meet current operating deficits. While the hospital never legally
became a property of the S. M. C. its financial history furnishes a
basis for a fairly strong claim by the Chinese Government. As to the
Victoria
[Page 1412]
Nurses Home, the
facts do not appear to support a very strong claim by the foreign
community of Shanghai. I doubt whether Dr. Cieh’s proposal regarding the
Victoria Nurses Home would prove to be permanently satisfactory.
Eventually it would probably become necessary to build a home for nurses
of the Country Hospital on the present hospital grounds or
elsewhere.
Last February I attended as informal meeting in the office of Mr. John
Keswick. Judge Helmick4 and
representative members of the British community were present. In that
meeting I presented the view that legally and equitably the foreign
community of Shanghai is entitled to complete control of the Country
Hospital and at least minority representation on the Board of Governors
of the General Hospital. As to the Victoria Nurses Home, I expressed the
thought that an acceptable basis for compromise would be the use of two
floors for the accommodation of nurses of the Country Hospital for a
period of five or ten years. During such period the Country Hospital
might find the funds with which to erect a building for the
accommodation of its nurses. Nurses of the Country Hospital are now
utilizing a substantial portion of the space in the hospital otherwise
available for patients. Judge Helmick fully supported my views regarding
the three institutions. The British representatives present, including
Mr. Jeffery, believed that a settlement on the basis of these views
would be highly desirable but they feared that efforts to reach such
settlement would not have strong support from the British Embassy which
would probably be influenced by the opinions expressed by Judge Mossop.
However, in subsequent meetings of the Second Sub-committee Mr. Jeffery
very strongly supported my position on these three institutions.
It is suggested that the views of the American Embassy be obtained
regarding the Chinese proposals made informally by Dr. Cieh. The State
Department’s views might be obtained by cable. I have informed Mr.
Jeffery of these proposals and understand he will transmit the
information to the British Embassy.
Sincerely yours,
