Foreign Relations of the United States Diplomatic Papers, 1932, The Far East, Volume IV

893.48/606: Telegram

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

Washington, September 27, 1932—noon.

329. Your 1053, September 2, 5 p.m., and 1065, September 4, 5 p.m.⁷⁸

1. Department desires to have postponed as long as possible a decision on the question of whether or not the United States Court for China or consular courts in Manchuria can entertain suits brought by “Manchoukuo or local governmental institutions forcibly taken over by Manchoukuo authorities.” With this end in view, the Consuls General at Mukden and Harbin should be instructed that, on occasions when the question is raised (and they should not under any circumstances raise the question themselves), they should give non-committal replies and suggest that the inquirers consult with the American banks in which the funds are deposited. The officials of these banks might be advised also to give non-committal replies, or if the question is pressed, to attempt to find some solution along the lines suggested in paragraph 2 of Harbin’s telegram of August 30, 3 p.m., to the Legation, namely, that the banks pay out the sums involved against suitable guarantees.

2. For your confidential information and not for communication to the Consuls General at Mukden and Harbin.

As the American Government has not recognized the status of the so-called Manchoukuo authorities either as de facto or de jure, the Department is of the opinion that they could not, either in their own name or in the name of an agent, sue in the United States Court for China or American consular courts in Manchuria. However, if those authorities should file suit, the American judicial authorities in China and not the Department would be called upon to decide, although it is assumed that the American courts in China, in consonance with the practice of the American judiciary in such matters, would be guided by the executive branch of the Government in determining whether the so-called Manchoukuo government or its agents have the legal status essential to a plaintiff in an American court. If an American court in Manchuria should decide to refuse a petition of the so-called Manchoukuo authorities, those authorities might thereupon attempt to restrain the American judicial authorities from further functioning in the territory under their control. The Department is naturally desirous of avoiding or postponing as long as possible such a situation.

As indicating the attitude of the United States Court for China in cases of this general character, the attention of the Legation is invited to the case of the National Government of China versus the Great American Insurance Company and the Merchants’ Fire Assurance Corporation decided by that Court in 1928. (See Shanghai’s 5491, May 5, 1928 to the Legation.⁷⁹) There may also be other cases decided by the United States Court for China involving the judicial status of unrecognized governments. The Legation might consider it desirable to bring these cases to the attention of the Consuls General at Mukden and Harbin.

Stimson

78. Neither printed.
79. Not printed; see telegram No. 499, June 27, 1928, 7 p.m., Foreign Relations, 1928, vol. ii, p. 189.