Findings of Fact 146 C. Cls. tiffs were in Shanghai. All were subsequently interned by the Japanese.10 Each of them was thereafter recognized by the United States as an American national. (b) During the 1946-47 negotiations (hereinafter described) to settle the claims of former employees of the Shanghai Municipal Council with the Government of the Republic of China, all of the plaintiffs were listed and considered as American nationals. 9. (a) Immediately upon the outbreak of hostilities between Japan and the Allied Nations, the control of the International Settlement at Shanghai passed to the Japanese through an act of war. All of the seven plaintiffs who were caught in Shanghai remained at their posts in the service of the Council, and continued their employment for varying periods after the beginning of hostilities." (b) In December 1942, through diplomatic exchanges between the United States and the Swiss Consulate in Shanghai, questions were raised as to the status of Americans continuing in the service of the Shanghai Municipal Council. The diplomatic exchanges were completed in March 1943. Meanwhile, the Department of State advised the American Legation at Bern that the "Swiss Consul General Shanghai should *** inform American nationals that voluntary continuation of functions at request of Japanese authorities will make them ineligible for financial or other assistance ***." During 1943 all of the seven plaintiffs were interned by the Japanese. None is now charged by defendant with conduct requiring forfeiture of a national's right to assistance and protection. 10. (a) The Department of State, acting through the Swiss Consulate in Shanghai, made advances of money to each of the interned plaintiffs (and, in some instances, to members of their families) for subsistence and medicines, 10 The seven were: Messrs. Blabon, Bryan, Holt, Lawler, O'Dwyer, and Thoemmes, and Miss Warmoth. The other three, Messrs. Jensen and Roberts and Mrs. Lane were in the United States. 11 One of the plaintiffs (Mr. Bryan) has filed with the court an affidavit stating that on December 8, 1941, he and other officers of the Council were told that they and their subordinates would have to remain in the employ of the Council until they were retired or permitted to resign; and that thereafter the Commander of the Japanese Forces in Shanghai issued a proclamation to the effect that all employees of the Council would remain at their posts, under pain of death, until relieved or allowed to resign. 13 Findings of Fact and for the expenses of passage in repatriation to the United States. One of these plaintiffs has repaid to the United States all such advances.12 One has repaid all of such advances except a very small amount.13 Repayment has not been made by five of the plaintiffs.' 14 (b) Defendant asserts that the amounts of the unpaid advances should be offset against any payments that may be authorized to be made to the six plaintiffs who have failed to repay such advances, irrespective of the basis of such authorization.15 11. Plaintiffs' claims are for divers emoluments of their employment by the Shanghai Municipal Council. Three of the plaintiffs, for example, had retired and were entitled to pensions. The pensions were duly paid through September 30, 1941, but no payments have been made since that date.16 All of the seven who remained in the employ of the Council had made contributions to the superannuation fund (to which the Council also contributed) and were entitled to withdrawals from the fund and to various other benefits as well. In summary, the claims are founded upon the declarations contained in S. 2429 as quoted in finding 2 (c), and upon the further ground that in the words of the State Department report, *** these Americans in accepting employment with the Shanghai Municipal Council, were working for an institution, in the proper functioning of which this Government was interested and concerned." III. THE ISSUES 12. At the initial pretrial conference in this proceeding the parties agreed upon the following statement of the issues: (1) Are there, or are there not, equitable considerations, within the meaning of section 2509 of title 28, 12 Mr. Blabon. 13 Mr. Bryan. 14 Plaintiffs Holt, Lawler, O'Dwyer, Thoemmes, and Warmoth. 25 Offsets should be made, defendant urges, against even er gratia payments. Defendant denies legal or equitable obligation to make payments to any of the plaintiffs. 16 The Japanese controlled Shanghai and the Council when the next payment was due (December 31, 1941). When Shanghai was liberated, control of its assets (as well as responsibility for its obligations) passed to the Government of China. The Council never again functioned as such. Findings of Fact 146 C. Cls. United States Code [citing Burkhardt, et al. v. United States, 113 C. Cls. 658], because of which the court should report to the Congress that certain amounts are equitably due from the United States to the claimants; and (2) if so, what are the amounts so due to the several plaintiffs? IV. EXTRATERRITORIALITY 13. The unique character of the International Settlement at Shanghai as a body politic was a by-product of the legal and political anomaly known as extraterritoriality, which, in turn, was a diplomatic by-product of commercial relations between China and nations of the West, with Great Britain and the United States as its principal architects. 14. Barely a century has passed since contacts (commercial or cultural) between China and any of the nations of the West became general. European (Catholic) missionaries were in China between 1600 and 1800 and helped to acquaint the Chinese with Western science and religion and, by their writings, had spread some knowledge of China in Europe. The Chinese reaction to the missionaries has been aptly described as one of acquiescence rather than tolerance. The Chinese of the Manchu dynasty were not prepared even to acquiesce in the presence of European merchants, who were never permitted to penetrate the empire as the missionaries had done. The merchants gained almost no recognition until British arms forced the issue in a war with China in 1839-1842. 15. (a) Extraterritoriality was a natural consequence of the efforts to allay the tensions that had led to armed conflict between Britain and China. In the only Chinese port theretofore open to foreign merchants (Canton), the Europeans were confined to a small area, and were required to quit the continent altogether during part of each year. Chinese were forbidden to teach their language to foreigners. Business could be conducted only through an officially designated group of Chinese merchants. Chinese officialdom regarded all foreign envoys as bearers of tribute, and resolutely refused official intercourse on terms of equality with any representatives of foreign nations. There were no fixed tariff charges, and the exactions of petty officials were often venal. 13 Findings of Fact (b) Chinese law emphasized group responsibility. The entire British community at Canton was held liable for the misdemeanor of any of its members. In death cases, even when the death had been accidental, the Chinese insisted upon a life for a life. All Westerners were subject to Chinese law and Chinese courts. (c) The Europeans were equally incomprehensible to the Chinese. When the Manchu Emperor was finally frightened into making concessions to Western trade, the suggestions put forward by the British (and soon afterward by the Americans) for extraterritorial rights on the soil of China were received with equanimity born of relief. As one writer has expressed it: 17 To the Manchu authorities who had bitterly resisted the trade assaults of the West, this extraterritorial scheme was not unwelcome; once commercial relations had been forced on them it was better that the tumultuous and incomprehensible barbarians should be remitted to the discipline of their own authorities with whom alone would lie the blame for failure to pacify them * * *. 16. (a) The Treaty of Nanking, dated August 29, 1842, between Great Britain and China, provided (1) for the cession of the island of Hongkong to the British; (2) for the opening to foreign residence and commerce of the ports of Canton, Amoy, Foochow, Ningpo, and Shanghai; (3) for liberty to appoint consuls at each port; (4) for communications between British and Chinese officials of the same rank on the basis of equality; and (5) for a "fair and regular tariff." The rudiments of extraterritoriality were first expressed in a supplementary treaty in 1843. (b) Similar trade treaties were made by China with the United States and with France in 1844. The American treaty (dated July 3, 1844) was negotiated by Caleb Cushing as the American Commissioner. Whereas the conflict between Britain and China had been precipitated by Chinese measures to stop the importation of opium into China by the British, Cushing agreed that United States protection should be withheld from American citizens engaging in the opium traffic. In return the Chinese made further con 17 Survey of American Foreign Relations (prepared under the direction of Charles P. Howland), 1980, pp. 176–177. 588587-62 Findings of Fact 146 C. Cls. cessions to the Americans in the extension of extraterritoriality than had been given to the British. The benefit of concessions to one, however, redounded to all through the inclusion in the several treaties (with Britain, the United States, France, and, a few years later, with Belgium and Sweden) of the most-favored-nation clause. (c) The Sino-American Treaty of July 3, 1844, elaborated the theme of equality and reciprocal respect, required the Chinese local authorities to protect American citizens "from all insult or injury of any sort on the part of the Chinese," and provided: *Subjects of China who may be guilty of any criminal act towards citizens of the United States, shall be arrested and punished by the Chinese authorities according to the laws of China; and citizens of the United States, who may commit any crime in China, shall be subject to be tried and punished only by the consul, or other public functionary of the United States, thereto authorized according to the laws of the United States. * ** All questions in regard to rights, whether of property or person, arising between citizens of the United States in China, shall be subject to the jurisdiction and regulated by the authorities of their own Government. And all controversies occurring in China between citizens of the United States and the subjects of any other Government, shall be regulated by the treaties existing between the United States and such Governments, respectively, without interference on the part of China. 17. Foreign merchants promptly moved into the treaty ports and began the extension of trade with the Chinese. Inevitably, frictions developed. Representatives of the Treaty Powers felt that the Chinese were not abiding by their undertakings. The Chinese (especially the Manchu officialdom) considered the demands of the foreigners excessive. Moreover, Chinese tradition against receiving or treating foreigners as equals was stubbornly ingrained. Fifteen years after the first application of force, the British (joined this time by the French) again resorted to arms. When the Manchus again capitulated, a new series of treaties followed, in much the same mold as the former agreements albeit with additional strength to commit the Chinese to their under 4 |