SIR: I have to inclose for your information and guidance a copy of an instruction dated the 25th instant to the consul at Amoy, regarding the status in China of American corporations whose stock is owned wholly or in part by foreigners, as well as the status of American corporations organized under the laws of the Philippine Islands. You are requested to furnish a copy of the inclosed instruction to the various consulates in China, including Hongkong and Tsingtau, as well as to the United States court for China. SIR: The department acknowledges the receipt of your No. 96, of June 22, 1909, and your No. 120, of October 2, 1909, regarding the status of the firm of Siuliong & Co., and the nature and measure of protection to be accorded by you to this firm. In the question of the status which should be given in China to American corporations whose stockholders are mainly foreigners there appears to be two distinct elements: (a) The right which such corporations might have to the diplomatic protection or intervention of this Government. (b) The right which such corporations might have to the status of an American citizen in matters of litigation before the United States consular courts of China and before the United States court for China. As to the first point, it would appear that inasmuch as no natural citizen of the United States has an absolute and inherent right (that is, a right that is enforceable in the courts) either to the protection or the intervention of this Government the Secretary of State may make such rules and regulations regarding the status of these artificial persons-these corporations as may seem to him meet and desirable. In framing such rules and regulations, however, it may be found to be to the commercial and other advantage of the United States fully to recognize and protect in China all corporations organized under the laws of the United States, or of any of its territorial possessions, irrespective of the question as to whether the stockholders or a majority thereof are or are not citizens of the United States. As to the second point, it appears to the department that, as a legal proposition, our consular courts and the United States court for China will, under the present state of the law, have no option but to recognize as American citizens all American 197 corporations irrespective of the nationality of the stockholders; and to consider all American corporations as entitled to invoke the jurisdiction of the respective courts. This would appear to follow from the fact that our general statutes conferring extraterritorial jurisdiction, as well as the statute organizing and conferring jurisdiction upon the United States court for China, all speak of a jurisdiction over citizens of the United States, or, as the act for the United States court for China specifies, any citizen of any territory belonging to the United States. It is assumed that for purposes of jurisdiction a corporation organized under the laws of the Philippine Islands would be a citizen of the United States within the meaning of those sections of the Revised Statutes which confer jurisdiction upon our cousular courts. It seems to be the established law of this country that so far as the question of the taking of jurisdiction by our Federal courts is concerned a corporation is to be regarded as a citizen within the meaning of the constitutional provision governing these matters. It would appear not unreasonable to assume that the same rule would and should be applied by our courts in China. Therefore, as a judicial question affecting the jurisdiction of our various courts in China, it would seem that all American corporations must be regarded as American citizens. Briefly, then, it would appear from the above-first, that the department may or may not extend to such corporations diplomatic protection, as it may deem advisable; and, second, that in all probability an application by our courts in China of the law now obtaining in this country will require them to recognize as American "citizens" for purposes of jurisdiction all American corporations, irrespective of the nationality of the stockholders. Since the firm of Siuliong & Co. appears to be organized under the code of commerce of the Philippine Islands, and is practically a joint-stock company which, under said code, has an entity separate from its shareholders, there appears to be on the facts presented no objection to the registration of this firm at your consulate. A corporation which, like this firm, has a separate entity from its stockholders, duly organized under American laws, is technically regarded, irrespective of the citizenship of its stockholders, as an American corporation subject to American jurisdiction and entitled to American protection in the discretion of this department. It is understood, however, that registration of such companies indicates nothing except that the corporation is a duly organized American compan, and does not necessarily imply that such corporation is entitled to the diplomatic protection or intervention of this Government. You will, of course, understand that the above expressions regarding the status, before the consular courts and the United States court for China, of those American corporations whose stock is owned wholly or in large part by foreigners, as well as the question of the status before the same courts of American corporations organized under the laws of the Philippine Islands, are but statements of the department's opinion upon this matter, which can not be and are not intended to be conclusive or controlling upon either the consular courts or the United States court for China in the exercise of their sound judicial discretion regarding this matter. There appears to be no law granting this department control over the unofficial display of American flags in foreign countries. The department understands that it is customary for American firms in China to fly the American flag on all American national holidays. I am, etc., P. C. KNOX. File No. 788/354. TAXES LEVIED IN MANCHURIA UPON FOREIGN GOODS CERTIFIED AS EXEMPT THEREFROM. The Acting Secretary of State to the Chinese Minister. No. 194.] DEPARTMENT OF STATE, Washington, March 12, 1910. SIR: I have the honor to call attention to the improper levy by the provincial authorities in Manchuria of certain taxes upon foreign goods which are provided with certificates exempting them from such taxation. The facts are set forth by the Newchwang Chamber of Commerce in a note to the consular body at that port in the following terms: A tax, commonly known as the consumption tax, is collected in the treaty marts on goods arriving there under exemption certificates, and elsewhere in the interior on foreign goods sent up from the treaty ports under transit pass. In the province of Kirin an additional tax of 1 per cent ad valorem, called the "business tax," is imposed on all goods, and a special tax of 15 candereens per case on kerosene oil, both of which are levied in contravention of the regulations, and specific cases in which the exemption certificates have been disregarded by likin officials at LiaoYang and Tung-Chiangtzu have been brought to the notice of the viceroy. You will probably recall that after the opening in 1906 of several inland cities of Manchuria to international residence and trade,1 the question arose as to whether or not likin or other taxes could be levied upon goods in transit from the seaports to these inland open cities, and that after some correspondence between the American Legation in Peking and the Chinese foreign office the latter on November 19, 1907, sent to the legation a copy of certain provisional regulations which had been adopted by the Chinese Imperial Maritime Customs for such shipments. According to these regulations "all foreign goods which have paid the regular import duty at Tientsin, Newchwang, Antung, or Dalny, as well as all native goods which have paid the coast trade half duty * * and which are intended for transshipment to any of the newly opened ports of Manchuria will be given a special certificate exempting them from further payment of duty and this irrespective of the manner in which said goods are transshipped to their destination." These regulations were accepted by the American Legation as satisfactory and it was hoped by this Government that there would be no further difficulty over this question. The regulations are still in force, and it would seem quite evident that the levy of a "consumption tax" or "business tax" or any such charge, by whatever name called, upon goods covered by exemption certificates is a plain violation of the provisions quoted. In case of goods sent into the interior under transit pass the collection of any such taxes is equally illegal and is expressly forbidden by the provisions of the commercial treaties which state that upon payment of a commutation transit duty or tax equal to one-half of the import duty in respect of dutiable articles and to 2 per cent upon the value in respect of duty-free articles, a certificate shall be issued which shall exempt the goods from all further inland charges whatsoever. Such illegal taxation of foreign imports bears very heavily upon American trade, and the American Government must solemnly remonstrate against this violation of treaty provisions and customs regulations. I have the honor therefore to ask that you be so kind as to convey to the Chinese foreign office at Peking the request of this Government that instructions be issued without delay to the provincial authorities in Manchuria to cease the collection of any duty or tax upon goods covered either by exemption certificates or by inland transit passes. Accept, etc., HUNTINGTON WILSON. 1 See Foreign Relations, 1906, p. 162 et seq., and Foreign Relations, 1907, p. 130 et seq. No. 406/292. No. 37.] COPYRIGHTS IN CHINA AND JAPAN. The Acting Secretary of State to Minister Calhoun. DEPARTMENT OF STATE, SIR: I have to inclose herewith for the information of the legation copy of a letter of to-day's date to Messrs. Ginn & Co., publishers of school and college textbooks, New York City, relating to the present status of copyright protection afforded American publications in China and Japan. It will be noted that such protection as is accorded in Article XI of the treaty of 1903 between the United States and China is to be given "in the same way and manner and subject to the same conditions upon which it agrees to protect trade-marks"-that is, upon registration by the proper authorities of the United States at such offices as the Chinese Government shall establish for such purpose, on payment of a reasonable fee, after due investigation by the Chinese authorities and in compliance with reasonable regulations. Such protection, it is also clear, is to be given for 10 years from the date of registration. The protection, however, promised in the article does not appear to be of much value. The article merely provides that books, maps, etc., especially prepared for the use and education of the Chinese people and translations into Chinese of any books are to be protected in the form in which so especially prepared or translations in the original form of publications. Few books, if any, published in the United States are especially prepared for the use and education of the Chinese people, and no others can find protection against copyright infringement in China. Even these few may be abridged or changed in unimportant respects and then be published in China without redress. As for translations, it is quite easy to modify a few sentences and paragraphs without changing the sense or lessening the value of such works, and by so doing produce a printed edition which can not be touched. Even original works in Chinese by American missionaries or others are just as easily deprived of protection. The article, therefore, really affords no protection of value. Nevertheless, Chinese officials have on various occasions shown a willingness to register book titles and issue proclamations for their protection, and such proclamations have the effect of deterring some who would otherwise pirate these publications. As to the provision for registration no arrangement has yet been approved by the Chinese Government and no regulations for protection have been drawn up. The department is aware that the Chinese Government in replying to inquiries regarding the copyright regulations state that such regulations must await the adoption of satisfactory trade-mark regulations. The department understands that such trade-mark regulations were adopted in 1903 and were acceptable to the United States, Great Britain, and Japan, but other powers objected, and repeated conferences upon the subject since that date have been without result. I am, etc., HUNTINGTON WILSON. [Inclosure.] The Acting Secretary of State to Messrs. Ginn & Co. DEPARTMENT OF STATE, GENTLEMEN: I beg to acknowledge the receipt of your letter of the 21st ultimo, requesting information as to the present status of copyright protection afforded American publications in China and Japan. In reply I quote below Article XI of the latest commercial treaty between the United States and China, which, you will observe, is far from satisfactory, inasmuch as it guarantees protection to such books only as are "especially prepared for the use and education of the Chinese people, or translation into Chinese of any book," and, even in the case of such books, protects the proprietor merely against reprinting in the same form as the registered work. The article reads as follows: ARTICLE XI. Whereas the Government of the United States undertakes to give the benefits of its copyright laws to the citizens of any foreign State which gives to the citizens of the United States the benefits of copyright on an equal basis with its own citizens: Protection of copyTherefore the Government of China, in order to secure such benefits in the right. United States for its subjects now agrees to give full protection, in the same way and manner and subject to the same conditions upon which it agrees to protect trade-marks, to all citizens of the United States who are authors, designers, or proprietors of any book, map, print, or engraving especially prepared for the use and education of the Chinese people, or translation into Chinese of any book, in the exclusive right to print and sell such book, map, print, engraving, or translation in the Empire of China during 10 years from the date of registration. With the exception of the books, maps, etc., specified above, which may not be reprinted in the same form, no work shall be entitled to copyright privileges under this article. It is understood that Chinese subjects shall be at liberty to make, print, and sell original translations into Chinese of any works written or of maps compiled by a citizen of the United States. This article shall not be held to protect against due process of law any citizen of the United States or Chinese subject who may be author, proprietor, or seller of any publication calculated to injure the well-being of China. It will be noted that books must be registered in order to secure protection, and the Chinese Government has not yet issued any regulations or made any provisions for the enforcement of this article of the treaty. Pending the issue of such regulations, however, the Chinese authorities are allowing book titles to be registered at the offices of the imperial maritime customs under the same arrangement as that made in the case of trade-marks. Prior to the ratification of the latest commercial treaty between the United States and China, the Chinese local authorities frequently manifested a willingness to protect American copyrights by issuing, at the request of American consular officers, proclamations forbidding the reprint of books registered at the consulate, and in a number of cases native publishers and booksellers were fined for disregard of such proclamations. This procedure is still possible, and, in fact, is in vogue, but it can not be insisted upon as a right. With respect to infringement by non-Chinese residents of China, there only exists one convention-that between the United States and Japan. This convention guarantees the protection of American copyright against infringement by Japanese or Koreans in China. American copyright is protected in Japan by the convention between the United States and Japan of 1905. By the trade-mark conventions signed May 19, 1908, by the United States and Japan, similar protection is extended against infringement of American copyright by Japanese and Korean subjects in Korea as well as in China. There is inclosed herewith for your information a pamphlet prepared in this department on the protection extended to patents, designs, trade-marks, and copyrights in China, Japan, and Korea. I am, etc., HUNTINGTON WILSON. |