611.93231/5–551: Telegram
The Secretary of State to the Consulate General at Hong Kong
3678. Contel 3286 May 5.1 FYI fol is approx text ltr Apr 26 from Sec State to Secy Treas:
“Dept has engaged in extensive consultations with Treas re nr of problems arising out of presence of Amer missionaries and reps of Amer business enterprises in continental China. On basis our consideration these problems, Dept has reached conclusion that from point of view of conduct of Fon affairs of US it wld be desirable for this Govt to operate its financial controls with respect to China in such way as to avoid hindering exit from China of Amer missionaries and reps Amer business enterprises, notwithstanding fact that operation of controls in this manner will have effect of making available to Commie China some Fon exchange which might otherwise be unavailable. It is felt that long run interests of US wld be best served if steps were taken which wld have effect of permitting these people to meet such of their obligations as wld facilitate their efforts to get out of Commie China. An opposite course might lead to such persons being held as hostages, subj to extreme forms of pressure and thus further exacerbate existing situation.
It is our understanding that at present time Fon Assets Control is being presented with nr of applications relating to these persons. One class of applications is understood to relate to Amer business enterprises which have branches or subsidiaries in Commie China having one or more non-Chi reps whose exit permits from China are being withheld by Commie Chi. These firms and reps have outstanding against them various Chi claims of one sort or another. It is our view that at present time it wld be desirable for Fon Assets Control to grant licenses in this class of case authorizing payment of outstanding claims whenever (1) reps of Amer business enterprises have applied for exit permit from China and taken all possible steps necessary to qualify for receipt of such permit; (2) applicant asserts to best of his knowledge and belief claims being made by Chi represent totality of claims which will be made against persons and enterprises involved; and (3) claims being pressed appear to have some color of validity and represent more than bare effort to extort funds. In accordance with usual policy of urDept on payments to China, it is suggested that wherever possible licenses shld require that remittances be effected through some currency other than US dols.
Is believed that licenses under preceding para shld be granted notwithstanding fact that sums requested by Chi are substantial. However it is requested that any application to satisfy claim in excess of $100,000 shld not be granted without further discussion between our [Page 1986] two Depts. It is our view that at this time licenses shld not be granted if they wld entail taking of any action which wld be deemed by Treas to establish any precedent prejudicial to overall Fon Assets Control program.
It is felt that same policy mutatis mutandis shld be followed in case of applications for payments of claims against Amer missionaries in China who are awaiting exit permits from that country.
Policies set forth in this letter are of course subj to reconsideration from time to time. It is our present view if, after sufficient period of time, payment under Treas license by private persons of Chi claims against Amer business enterprises and missionaries does not result in granting of exit permits by Chi it will be desirable to cease issuing licenses authorizing such payments.”
Policy guidance in above ltr was worked out after extensive consideration of problem by both Depts and consultation with private Amer interests.
Treas license to Bank Amer San Francisco to remit funds to apl office Shanghai, in which Dept concurs, was issued pursuant above ltr.
- In telegram 3286 from Hong Kong, May 5 (not printed), the Consul General inquired about a Treasury license granted to the Bank of America for the remittance of funds to the Shanghai office of the American President Lines (611.93231/5–551).↩