File No. 893.631/1.
The Secretary of State to Minister Reinsch
Washington, May 1, 1914.
Sir: The Department is in receipt of your despatch No. 166 of March 24, 1914, regarding the new Mining Enterprise Regulations.
While these regulations appear to be an improvement over those of 1907, they seem still to be subject to some of the objections which were pointed out by the Department in its No. 413 of February 12, 1908, to the Legation (Foreign Relations 1908, pp. 152, 173 and 175).
The provisions of Article 4, first paragraph, subjecting American citizens to the “regulations” and “laws” referred to, are objectionable unless coupled with a saving clause relating to our extraterritorial rights in China. The limitation in paragraph 2 of Article 4 upon the rights of American citizens with respect to the number of shares they may hold in a mining concern seems objectionable, such objection being based upon the provision of Article VII of the Treaty of 190347 that the Chinese Government in recasting its mining regulations “will offer no impediment to the attraction of foreign capital.”
With respect to paragraph 3 of Article 4, it is very doubtful whether the diplomatic and consular officers of the United States have the capacity to issue the certificate contemplated by the provisions of this paragraph, and moreover it would be unwise for such officers to issue these certificates even if they had the capacity, unless with the addition of the saving clause above referred to.
Article 93 is also objectionable as in derogation of our extraterritorial rights in China, as are also Articles 94–105 relative to the punishments for violations of the mining regulations, which appear to apply to all persons as there seems to be no provision in the regulations excepting foreigners from the local jurisdiction. Under the regulations as they stand it would seem that China might plausibly claim the right to inflict the punishments in question upon American citizens. It would appear, therefore, that the regulations should contain a provision for the exception of foreigners from the local jurisdiction with respect to the punishments in question and setting forth that they should be dealt with by their own courts.
[Page 135]It may be said, moreover, that it would appear that Articles 86 and 87 might well operate prejudicially and unfairly as against persons engaged in mining enterprises, and that warrant exists for a protest against the features of the regulations which seem to be unduly “restrictive” as well as against the provisions in subversion of the extraterritorial rights of the United States.
You are accordingly directed to bring to the attention of the Chinese Foreign Office the views of this Government as expressed above.
I am [etc.]