not be considered in any way as advancing American interests or prestige in China. They are calculated to foment discord and to disseminate propaganda prejudicial to peace and good order and to the friendly relations between peoples and governments with which the American Government and people are at peace. I consider that such activities are a gross abuse of the privilege of extraterritoriality and that in pursuance of the Good Neighbor policy of the American Government no recognition, countenance or support should be given to Granich in such activities. The Department is aware that there is suspicion that the activities of Granich are being conducted in the interest of the Third Internationale.

GAUSS

811.5034 (China) Eastern Publishing Co./28

The Consul General at Shanghai (Gauss) to the Secretary of State No. 853

SHANGHAI, June 25, 1937. [Received July 27.]

SIR: With reference to the Department's telegram No. 121 of May 13, 1 p. m., and my reply No. 233 of May 19, 5 p. m., concerning the radical propaganda magazine the Voice of China, published at Shanghai by the Eastern Publishing Company owned by one Max Granich, an American citizen, I have the honor to report that early in June the Shanghai Municipal Police supplied the Consulate General a copy of the June first issue of the Voice of China and directed attention to the fact that it contained a statement that the publication is "registered with the Central Publicity Committee of the Kuomintang at Nanking." An officer of the Consulate General was informed that the Municipal Police were making inquiries to ascertain whether such registration had actually been effected.

On June twelfth there was received from the Deputy Commissioner of Police (Special Branch), Shanghai Municipal Council, a copy of a confidential memorandum reporting the result of the inquiries made by the police. A copy of the memorandum is enclosed.32

The June fifteenth issue of the Voice of China has now been issued, a copy supplied to the Consulate General by the Municipal Police, and attention directed to the statement now appearing therein as follows:

"Published twice a month by The Eastern Publishing Co., (An American Firm) 749 Bubbling Well Road, Shanghai, China. Registered with the Central Publicity Committee of the Kuomintang at Nanking, and with the Chinese Post Office as a newspaper, Registry No. 2306."

32 Not printed.

The officer of the Police who supplied the copy of the publication to the Consulate General stated that while he had not yet definitely confirmed the registration of the publication with the Chinese Office he felt certain that this had now been effected.

The publication appears, therefore, to have been reinstated in the good opinion of the Chinese authorities, not seemingly by reason of any radical change in the magazine's character but because the Chinese authorities and the Kuomintang headquarters in particular have modified their views, presumably as the result of recent political events following the Sian coup.33 As the Department is aware from the political reports from China, some sort of rapprochement has taken place between the Chinese Communists and the Kuomintang and Nanking Government.

It is quite likely that the Voice of China will abandon the tendency which it had for sometime of criticizing the Government at Nanking and devote more effort even than before to the propagation of antiJapanese sentiment. Its activities in this respect are likely to become even more embarrassing to the American authorities than were those in which criticism was directed against the Nanking Government.

I continue to hold firmly to the view expressed in the last paragraph of my telegram No. 233 of May 19, 5 p. m., to the effect that the activities of this publication cannot be considered in any way as advancing American interests or prestige in China; that they are calculated to foment discord and to disseminate propaganda prejudicial to peace and good order and to friendly relations between peoples and Governments with which the American Government and peoples are at peace; that such activities are a gross abuse of extraterritoriality; and that in pursuance of the good neighbor policy of the American Government no recognition, countenance, or support should be given to Granich in his activities.

The Department is aware of the reports that the activities and support of the Third Internationale are being directed away from criticism and attack on the National Government of China, toward the development of a "popular front" of opposition to Japan.

The propagandists of the Kuomintang are only too willing to allow others than the Chinese authorities to bear the burden of complaint for the publication and dissemination of anti-Japanese propaganda of the character of the articles appearing in the Voice of China. One can imagine them well disposed toward the conduct of such propaganda under the American flag, with the opportunity that it offers to evade responsibility before Japanese complaint and transfer the burden to the American authorities. I am somewhat surprised,

33

See Foreign Relations, 1936, vol. IV, pp. 414 ff., and ibid., 1937, vol. I, pp. 1 ff.

however, that the Central Publicity Committee of the Kuomintang, even though it is becoming increasingly bolder along with the Government and local authorities in the attitude toward Japan and the Japanese, should permit a public sponsorship of the activities of the editor of the Voice of China. I anticipate that in due course, even though the publication may retain the support and recognition of the propaganda organ of the Kuomintang, it will be found expedient to direct Granich to remove from the caption of his publication this Party sponsorship of his activities.

I shall, of course, continue in my attitude that the person and property of Max Granich as an American citizen are subject to American protection; but I shall also continue, unless otherwise instructed by the Department or by the Ambassador, to decline to give Granich any recognition, countenance or support in his anti-Japanese propaganda activities.

While numerous reports on the Voice of China have been communicated to the Department, I have received no instructions therefrom in criticism of the attitude assumed by the Consulate General or in correction of the position which has been taken as representing, in my opinion, the attitude calculated to serve the best interests of the United States. I invite any instructions the Department may see fit to give for my guidance in future in connection with this magazine and the activities of its editor and publisher.

Respectfully yours,

C. E. GAUSS

811.5034 (China) Eastern Publishing Co./27

The Secretary of State to the Consul General at Shanghai (Gauss)

WASHINGTON, July 12, 1937.

SIR: With reference to your telegram No. 233 of May 19, 5 p. m., the Department has reviewed the correspondence in regard to the Eastern Publishing Company and has given careful consideration to the statements of fact and of your opinion and official position based thereon which are contained in the telegram under reference.

The Department concurs in the view that the activities in which Mr. Max Granich, the owner of the Eastern Publishing Company, is engaged in China should not receive any encouragement or support from this Government. However, it does not seem to the Department, all available evidence being considered, that the circumstances of this case warrant any qualification or departure from the position taken in the Department's telegram No. 230 of July 30, 1932, 2 p. m., in regard to the Searchlight Publishing Company.

Foreign Relations, 1932, vol. IV, p. 656.

Inasmuch as the Eastern Publishing Company appears to be an American firm and as the confiscated magazines appear to be the property of that firm, it follows that the property is subject exclusively to American jurisdiction and that the confiscation of the property by the Chinese authorities is an unwarranted invasion of American jurisdiction and a violation of our treaties with China.

The correctness of that conclusion would not seem to be affected by the fact that the property in question was deposited with the Chinese postal authorities for transmission or by the fact that the seizures were made by censors operating under the National Military Commission.

While the publication under reference does not appear to be legally objectionable under the laws of the United States and does not therefore warrant judicial action by the American authorities in China, the Department nevertheless desires to cooperate in every reasonable way with the Chinese authorities toward preventing the publication and distribution in China by American nationals of material which could reasonably be regarded by those authorities as offensive to the Chinese Government or people and therefore prejudicial to friendly relations between the United States and China. The Department therefore would not be disposed to raise objection to the adoption by the Chinese authorities of such reasonable administrative measures as may be available to prevent the circulation and distribution of the magazine under reference, such as a denial of postal facilities or any other facilities under the exclusive control of the Chinese authorities, provided, however, that any action which the Chinese authorities might take for the accomplishment of this purpose would not include any assumption of jurisdiction over an American national or his property.

This is the position taken by the Department in the case of Searchlight Publishing Company and is based on the distinction between diplomatic protection which may be granted or withheld in the discretion of the President and the treaty rights of extraterritoriality to which American nationals have a legal claim, which are not within the authority of this Department to disregard.

If the Chinese authorities should attempt to confiscate future issues of the publication under reference, you should be guided by this instruction in protesting seizure, and in endeavoring to effect the return of any property seized to the American owner. You may in your discretion inform the appropriate Chinese authorities of the Department's position as set forth hereinbefore and request their cooperation in making that position effective.

Very truly yours,

For the Secretary of State:
SUMNER WELI ES

811.5034 (China) Eastern Publishing Co./29

The Consul General at Shanghai (Gauss) to the Secretary of State

No. 956

SHANGHAI, September 11, 1937. [Received October 12.]

SIR: I have the honor to refer to the Department's instruction of July 12, 1937, regarding the Voice of China published by the Eastern Publishing Company owned by Mr. Max Granich.

There is enclosed herewith in this connection a copy of a letter dated September 6, 1937, together with a copy of the enclosure thereto,35 addressed to this Consulate General by the French Consul General at Shanghai, regarding a request made by the Police of the French Concession at Shanghai, to have the Post Mercury Company, Federal Inc., U. S. A., of Shanghai, an American firm located in the French Concession here, cease acting as the printer of the Voice of China. The Department will note from the previous correspondence on the subject that the sale of the Voice of China in the French Concession at Shanghai has been banned for over a year.

Mr. Granich called at the Consulate General today and stated that he had received a letter from the Post Mercury Company, Federal Inc., U. S. A., informing him of the request made of the American firm by the French police. He stated further that he had called upon the French police to inquire as to the reason for the banning of the publishing of his magazine in the Concession but that the police refused to give any reason therefor or discuss the matter at length with him. Mr. Granich stated further that he would seek a new printer in the International Settlement or in the Nantao area of the Chinese Municipality of Greater Shanghai to print future editions of his publication.

Shortly after the September 1, 1937, issue of the Voice of China had come from off the press, a member of the Special Branch of the Shanghai Municipal Police force called at the Consulate General and stated that 3,000 copies of the magazine had been transported from the French Concession to 749 Bubbling Well Road in the International Settlement, and requested the approval of the Consulate General for the Settlement police to seize all 3,000 copies. The Consulate General refused to sanction the seizure of the magazine and requested the police to refrain from the confiscation of American owned property. Mr. Granich is not aware of the above.

On September 6, 1937, Mr. Granich called at the Consulate General and stated that about ten or twelve copies of the September 1, 1937, issue of the Voice of China, has been confiscated from a Chinese news vendor selling the magazine on the streets of the International Settle

35 Neither printed.