893.51/9–2647
The Chinese Ambassador (Koo) to the Secretary of State
The Chinese Ambassador presents his compliments to the Secretary of State and has the honor to present for the consideration of the United States Government the claim of the Chinese Government against the assets in the United States of the Russo-Asiatic Bank, a pre-Soviet joint stock bank which continued to function outside of Russia after 1917 until its failure in 1926.
The greater part of the claim of the Chinese Government, amounting to £641,794.13.3 is for funds paid to the Shanghai branch of the Russo-Asiatic Bank and transmitted to the London branch of the said bank during the period from 1917 to 1926, pursuant to the Chinese Reorganization Loan Agreement of 1913.42 It consisted of the difference between the amounts deposited by the Chinese Government in, and transmitted by the Shanghai branch of the Russo-Asiatic Bank to its London branch during that period, and the amounts disbursed by the London branch in payment of interest coupons and bond retirements in accordance with the Agreement under which the Chinese Government was obliged to provide duplicate payment of the difference.
The United States Government, as assignee of the Soviet Government under the so-called Litvinov Assignment of 1933,43 is taking steps to enforce against the New York assets of the Russo-Asiatic Bank a 1917 decree of the Soviet Government confiscating properties of that Bank. While the claim of the United States is still in litigation, it has been upheld to the exclusion of all other claims by the United States Court of Appeals for the Second Circuit, and petitions for review are now pending in the United States Supreme Court.
The Chinese Government, however, has had an interest in these assets antedating the Litvinov Assignment, which it asserted by initiating legal action in the United States prior to the Assignment. The grounds of the Chinese Government for the belief that its claim is entitled to special consideration are among others as follows:
- (1)
- The claim of the Chinese Government is based largely upon the payments made by it, pursuant to the Chinese Reorganization Loan [Page 1191] Agreement of 1913, to the Shanghai branch of the Russo-Asiatic Bank during the period of 1917 to 1926.
- (2)
- Such payments were made by the Chinese Government in a period of time during which (a) the United States Government formally advised the Chinese Government that it would not approve the Soviet confiscation of any pre-existing interests in the Chinese Eastern Railway—all the stock of which was owned by the Russo-Asiatic Bank; (b) the courts of the United States held, in a number of cases involving the Russo-Asiatic Bank, that the Soviet confiscatory decrees would not be enforced against its New York assets; and (c) in at least one case (de Guwoens v. Equitable Trust Company), deposits made in New York by the Shanghai branch of the Russo-Asiatic Bank, after the bank was nationalized in Russia, were held properly applied in satisfaction of a pre-nationalization debt of the Russo-Asiatic Bank at Petrograd.
- (3)
- Prior to the Litvinov Assignment and the assertion of any claim of the United States, the claim of the Chinese Government had not only been placed in litigation, but had acquired the protection of a writ of attachment granted by the Supreme Court of the State of New York and levied upon the deposits of the Russo-Asiatic Bank with New York banks.
- (4)
- In connection with its efforts to enforce its claim in the courts, the Chinese Government had incurred substantial expense which will have inured in large part to the benefit of the United States Government if the latter should ultimately recover the property in a suit.
There is enclosed a memorandum44 containing a more detailed statement of the relevant facts of the case.
Inasmuch as the award to the United States Government of the assets in New York of the Russo-Asiatic Bank would deprive the Chinese Government of the remedy that otherwise might have been available to it, and in view of the special circumstances briefly set forth above, the Ambassador, pursuant to instructions, requests that the claim of the Chinese Government against these assets be given due consideration in the event that the United States Government should ultimately be successful in its efforts to collect these assets or through a compromise settlement to be negotiated.
- For correspondence on this subject, see Foreign Relations, 1913, pp. 143–192.↩
- See note from the Soviet Commissar for Foreign Affairs to President Roosevelt, November 16, 1933, ibid., 1933, vol. ii, p. 812.↩
- Not printed.↩