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

26. Embassy’s 3, January 2, 2 p.m.9 regarding transfer former International Settlement. I can see little to be gained by contemplated action of British Embassy, i. e., to instruct advisors to inform municipal government that they are acting privately and not as official representatives. Reference my 298, November 30, 4 p.m. to Department, repeated to Chungking, and my dispatch 47, December 19 to Department, copy to Embassy;10 it is apparent from regulations enclosed with dispatch that advisors are not considered to be official representatives of their respective governments and contemplated British action seems unnecessary.

(Sent to Chungking as Shanghai Serial No. 3, January 6, 2 p.m., repeated to Department as Shanghai Serial No. 26.) On question of assets and liabilities, it is apparent that British concern is largely because numbers [of] British subjects are due pensions, etc., from former Shanghai Municipal Council11 whereas so far as I can ascertain only about 10 Americans citizens are concerned. British naturally expect American Government support in obtaining recognition of these claims by the Chinese. This in my opinion will be the big stumbling block in implementing the second paragraph of article III of our treaty and I believe our position vis-à-vis these British claims should be considered and clarified by the Department.

  1. See last sentence, second paragraph of telegram No. 9, supra.
  2. Neither printed.
  3. For a background memorandum, November 29, 1945, regarding the former Council, see Foreign Relations, 1945, vol. vii, p. 1382.