"(1) Is it the intention of the Chinese authorities, under the new procedure, to permit American missionary organizations and other persons and organizations authorized to hold property under perpetual lease, to sell or lease their property to any persons or organizations, Chinese or foreign, who may wish to purchase or lease it? "(2) Will such purchasers or lessees be given, without impediment, certificates of ownership or lease, as the case may be?" These were the questions which we put to the Foreign Office in the Legation's note of April 26, 1935, and instead of putting these questions in the way that Mr. Peck has put them, I am addressing a note to the Foreign Office requesting a reply at an early date to the Embassy's note of April 26, 1935. A copy of my note of today's date is enclosed.34 In the meantime, however, the Embassy will appreciate some expression of opinion from the Department as to the evident interpretation which the Chinese Government seeks to place upon Article 14 of the Treaty of October 8, 1903, between the United States and China, which article appears specifically to limit the right of missionaries and missionary societies to acquire land for missionary purposes only. More specifically, would this article in the opinion of the Department estop an American missionary organization from disposing of its land to a Chinese for purposes other than missionary and at the current market value of land held in fee simple? Respectfully yours, 893.52/398 NELSON TRUSLER JOHNSON The Ambassador in China (Johnson) to the Secretary of State No. 404 PEIPING, April 24, 1936. [Received May 18.] 34 SIR: I have the honor to refer to the Embassy's despatch No. 353 of April 7, 1936, on the subject of the re-registration of title deeds to property held by American citizens or organizations at Nanking, and to enclose for the information of the Department a copy of despatch No. 108 of April 2, 1936, from the Consulate General at Shanghai, reporting on a conversation held between Vice-Consul Jenkins 35 and the Mayor of Nanking regarding the policy to be followed in that city. It will be observed that, according to the information submitted in that despatch, the Nanking municipal authorities are prepared to admit the right of holders of leases in perpetuity to transfer their holdings to Chinese citizens and to others entitled to hold such leases. These oral assurances, however, would not seem of themselves "Not printed. 25 Douglas Jenkins, Jr., Vice Consul at Shanghai and Third Secretary of Embassy in China at Nanking. to constitute adequate guarantee of the nature of the policy to be followed in future by the Nanking Municipal Government and other administrative authorities as regards the matter under discussion, and the Embassy proposes to wait for a reply to its note of April 7, 1936, to the Foreign Office,36 before instituting any change in the present procedure of not advising American title-holders to apply for re-registration of their deeds until such time as there may have been a basic clarification of the question of right of transfer. Respectfully yours, NELSON TRUSLER JOHNSON 893.52/398 The Secretary of State to the Ambassador in China (Johnson) No. 185 WASHINGTON, May 29, 1936. SIR: Reference is made to your despatches Nos. 3557,7 353 and 404 of May 10, 1935, April 7, 1936, and April 24, 1936, respectively, in regard to the reregistration of land titles at Nanking involving a new lease agreement which the Nanking municipality proposes to issue to foreign holders of perpetual leases in exchange for the title documents which they now hold. The new lease agreement contains the following provision: "Owner: If the land is leased in perpetuity, and when in future the perpetual lessee does not need to use the land or when he dies and has no heir, the Nanking municipal government will purchase the land at the original price." You refer to apprehension felt by American missionary societies holding property under perpetual lease that the new lease agreement might involve impairment of the right long enjoyed by them to dispose of their leases to Chinese citizens or associations authorized to hold them under perpetual lease at the price obtainable by agreement of the parties. You express the view that the action taken by the municipal authorities at Nanking represents the attitude of the national government and may be expected to be applied to the question of the use and ownership of land by American citizens throughout the territory of China and you request an expression of opinion by the Department as to the rights possessed by American missionary societies holding land under perpetual lease by virtue of the provisions of Article XIV of the Sino-American Treaty of 1903, the pertinent part of which reads as follows: "Missionary societies of the United States shall be permitted to rent and to lease in perpetuity, as the property of such societies, buildings or lands in all parts of the Empire for missionary purposes The Department appreciates that the situation disclosed by the Embassy's despatches of May 10, 1935, and April 7, 1936, and their enclosures, reasonably warranted the apprehension felt by the missionary societies and the Embassy. However, the situation appears to have been materially changed by the facts reported by the Consulate General, Shanghai, in its despatch of April 2, 1936, to the Embassy, Peiping 38 (enclosed with your No. 404, April 24, 1936), from which it appears that the Mayor of Nanking has given definite oral assurances to American consular representatives that holders of leases in perpetuity covering property in Nanking will be permitted to transfer their holdings to Chinese, who upon such transfer will be given valid Chinese title deeds, and that holders of such leases will also be permitted to transfer their rights to others entitled to hold leases in perpetuity, and that the only circumstance under which the municipal government will insist upon purchasing the land will be where the municipality desires the land for some specific purpose, in which event it will be expropriated. It also appears that written confirmation of these assurances was being drafted by the municipal authorities and would soon be despatched to the Consulate General. As stated by the Consul General at Shanghai, these admissions on the part of the municipal authorities at Nanking would appear to place the rights of American holders of perpetual leases on substantially the basis claimed by the leaseholders, and if those admissions are confirmed in writing in accordance with the Mayor's oral promise or, irrespective of such written confirmation, by the action of the municipal authorities, there would not appear to be any further ground for apprehension respecting the effect of the new lease agreement on the rights of missionary societies holding land under perpetual lease. For this reason and because of uncertainty as to the precise legal rights claimable by missionary societies under the provisions of Article XIV of the Sino-American Treaty of 1903, the Department is of the opinion that it would be inadvisable to insist at this time on a reply to the Embassy's notes to the Foreign Office of April 26, 1935, and April 7, 1936, or to encourage perpetual lease holders to refrain from reregistering their titles in accordance with the municipal regulations under reference, unless, of course, the action of the municipal authorities should not substantially conform with their declarations. For the purpose of complying with the Embassy's request for its views as to the rights possessed by American missions holding land under perpetual leases, the Department has made a fairly comprehensive examination of available material on the subject, but its examination has not disclosed a satisfactory basis for consideration of the question of legal grounds, The Department is not aware of any Chinese law or regulation which defines perpetual leases or the extent 28 "Not printed. of the rights or obligations incident to such documents. Neither the treaty provision quoted herein nor the texts of perpetual leases throw any clear light on the question. There appears to be no express grant of a right of alienation of such lease nor any express prohibition of such right. The limitations or conditions stated in the treaty article might be held to be incorporated by reference in any perpetual lease issued to an American missionary society, and the continued validity of the lease might, therefore, be held to depend on the strict observance of the stated limitations or conditions with right of reversion in the lessor upon failure or violation of those conditions. From this point of view the treaty article in question does not seem to afford a very strong basis for claiming the right of free alienation of title, but a determination of this question on legal grounds is rendered difficult by the apparent absence of authoritative provisions establishing how or in whose behalf any possible reversionary right may be exercised. However, the repeated approval by the Chinese authorities over a long period of time of transfers of perpetual leases from missionary societies to Chinese citizens or foreign associations and the issuance of valid deeds of sale or of perpetual leases to the transferees reasonably warrants the conclusion that the Chinese authorities have never regarded such transfers as raising the question of reversion and accordingly it would seem reasonable to hold that the long-continued practice of the Chinese authorities constitutes clear recognition of the right of free alienation of perpetual leases held by American missionary societies. Since that now seems to be the attitude of the municipal authorities at Nanking, it would seem prudent to avoid any further discussion of the question at this time. Very truly yours, For the Secretary of State: 893.52/407 The Ambassador in China (Johnson) to the Secretary of State No. 494 PEIPING, June 5, 1936. [Received June 29.] SIR: I have the honor to refer to the Embassy's despatch No. 447 of May 12, 1936,39 regarding the re-registration of title deeds to property held by American citizens and organizations at Nanking, and to enclose for the information of the Department a copy of a despatch received from the Embassy at Nanking under date of May 27, 1936, forwarding a note received from the Ministry of Foreign Affairs under date of May 22 in reply to the Embassy's note of May 12 40 on the subject. It will be observed that the Nanking Municipal Government, as quoted in the aforementioned note from the Foreign Office, gives an undertaking that there will be eliminated from the new form of leasecertificate the present stipulation regarding the purchase of land from the perpetual lessee by the Municipal Government, and states in addition that any transfer of title to land leased by missions must be by sale to Chinese citizens or by lease to another mission for missionary purposes. 41 It is to be noted that the Foreign Office's note does not constitute an adequate reply to the Embassy's note of May 12, which requested of the National Government a reply to the Embassy's previous note of April 26, 1935, and a definitive regularization, in accord with existing treaty rights, of the administrative procedure as regards land tenure by American citizens and organizations in general throughout the country. Some concession has been made by the Nanking Municipal Government, it is true, but neither is that concession without its ambiguities nor has the Foreign Office committed the National Government to any policy of general applicability. In these circumstances, the Embassy is instructing Counselor Peck that American citizens and organizations in Nanking should not be advised to file application for re-registration of their property until it has been ascertained that the new form of certificate actually no longer contains any of the features which were formerly protested as being contrary to established procedure and treaty rights. A copy of that instruction, under today's date, is enclosed for the information of the Department.41 It is of course clear that, in any event, the procedure laid down for the Nanking Municipality cannot be taken as applicable to the country as a whole. The general problem therefore remains unsolved. As regards the current proposal of the American missionary societies to turn over their property titles to Chinese holding organizations, as referred to in Counselor Peck's despatch of May 27,* it is to be observed that such action would automatically eliminate many of the troublesome questions that arise for American Foreign Service Officers in connection with the administration of land-tenure matters, inasmuch as such property would no longer be in the legal possession of American organizations. The Embassy does not feel that it is in any position gratuitously to offer advice to the interested missionary societies one way or the other as regards the advisability of those organizations' so acting, and proposes not to concern itself in the matter. 41 Not printed. *Cf. also despatch No. 167 of May 21, 1936, from the Embassy at Nanking to the Department, and despatches No. 184 and No. 213 of May 15 and May 29, 1936, respectively, from the Shanghai Consulate General to the Embassy. [Footnote in the original; despatches not printed.] |