An ancestral burial plot. A vacant warehouse in Tientsin. Shanghai Yacht Club bonds issued in 1934. The list of claims by American citizens against the Chinese government for $197 million in losses incurred during the Communist takeover in 1949-50 reads like a litany of broken lives.
On the other side in the ledger is the $80 million in Chinese claims against dollar accounts in the United States, more commonly referred to as the blocked or frozen Chinese assets. These assets, in the form of bank deposits, government securities, stocks, bonds, notes and life insurance policies have lain untouchable in U.S. vaults for more than a quarter century.
One-fifth of the assest, mostly securities, are listed as belonging to individuals in China. But they have not been heard from.
From the beginning of renewed diplomatic contact with China in 1971, the issue of assets and claims has been considered very important for normal trade relations. Without a resolution, any Chinese vessel entering U.S. waters could be seized by Americans as payment for their claims.
An agreement in principle was worked out in 1973 but negotiations broke down two years later because of China's internal political upheaval. They began again after President Carter took office. The State Department refuses to comment on the negotiations.
When China entered the Korean War, in December 1950 President Truman froze Chinese assets inthis country. China retaliated by seizing all U.S. property in China. A 1951 Treasury census put the total of Chinese assets in this country at $105.4 million.
Of tht amount, some $25.5 million was "not considered harmful to American interests." This usually happened when a person left China for good or a corporation outside China no longer was controlled by China.
Exceptions were made by special license issued through the Federal Reserve Bank of New York. One specific provision of the regulations allowed any U.S. citizen living in a non-Communist country but with ties to China - author Edgar Snow, a friend of chairman Mao, is a good example - to withdraw up to $1,000 a month from his account for living expenses. Other provisions allowed withdrawal of between $100 and $250 a month for U.S. and Chinese citizens in this country.
The assets officially were unblocked on May 7, 1971. Since that time, the United States has permitted the owners to reclaim the funds accrued after that date. However, the principle and all profits made between 1950 and 1971 remain blocked.
From 1950 to 1969, giant corporations and missionaries alike were trying to get compensation for property left behind when they fled China. The U.S. Foreign Claims Settlement Commission finally decided that 384 of those claims could be proved to its satisfaction.
Among the claimants is Anna Chennault, widow of the World War II ace, Gen. Claire Chennault. She claims $143,500 on her own behalf and $15,000 from her late husband's estate.
Claim's from Caltex Corp. show business executives also lived handsomely in pre-Communist China. The firm's $17.7 million claim includes a $60,000 managing director's house in Shanghai. Built in 1933, it had "all modern facilities." Four other staff residences were evaluated at $660,000 in the early 1965s.
The largest claim - $53.8 million - was made by the Shanghai Power Co., a Delaware chartered corporation which is 95 per cent American owned. Ebasco Industries, Inc., of New York holds 80 per cent of the stock through the Far East Power Corp., and General Electric owns 4.6 per cent. The firm lost 46 acres of property in Shanghai on which stood generating stations, offices, residences, motor vehicles, etectera.
Corporate assets make up 62 per cent of the claims, while religious and non-profit organizations account for another 30 per cent. Individuals lay claim to $14 million, most of it in property. Due to currency devaluations at the time of the Communist takeover, bank accounts and other cash assets are now worthless. If precedents are followed, awards of $1,000 would be paid first, and higher claims prorated, according to the foreign claims, commission's general counsel, Wayland D. McClellan. The commission also has awarded 6 per cent annual interest.
This body validates and approves claims, but does not pay them. People will get their money only if the PRC offers to pay the claims, Congress appropriates the money (both unlikely possibilities), or the Chinese frozen assets are turned over to the U.S. government. Were the assets to be used to pay the claims, Americans woudl get roughly 40 cents on the dollar, minus a 5 per cent commission for Uncle Sam.
However, there may be a bonus in it for the claimants. Dennis O'Connel, OFAC's acting chief counsel, says that once the Treasury is granted control of the assets - an expected outcome of the Sino-American talks - it may ask the banks to pay 6 per cent interest on the money they have had the use of for two decades. As an account receiving 6 per cent interest doubles in 12 years, this could amount to a sizable additional sum.
The assets of 3,292 Chinese individuals, corporations, banks and the Chinese government are secured by 179 institutions here. About 90 per cent of the assets are held fby 19 firms, the vast majority of them banks located in New York City. Also mentioned by OFAC are the National Bank of Washington, Riggs, and National Savings & Trust.
The largest category - $53.2 million - consists of bank deposits, about half of which are held for foreign banks holding corresponding dollar amounts for persons in China. Most of them are non-interest-bearing.
The second larfgest category - $15.6 million - is made up of securities, two-thirds of which are held for individuals in China. During the time the assets were frozen, normal trading was permitted in the accounts by the custodians, who pockedted the customary fees. But all profits - interest, dividends, capital gains - also were frozen. They could not be transferred to another person, even if the owner died.
So it is possible that the ex-professor in the rice pady with the GM shares is a rich man - on paper - though he probably never will know it.
When will the assets/claims question be solved? No one can predict. But President Carter has called the claims solution "the first step" to normalization.
One of the thorniest issues to be resolved is that of adverse claims, those made against the frozen assets by people not now owning the accounts. The largest group could be expected to be the Nationalist Chinese. Thus far, Taiwan has claimed only $9.6 million of the assets.
However, Charles H. Bayar, writing in U.S. Chain Business Review, foresees the possibility that Taiwansee banks and emigre corporations could lay claim to the entire amount on the grounds that they are the rightful owners of pre-1950 assets. Bayar doubts the PRC would be willing to go to court with Taiwan over this issue. He fells instead that U.S. courts no doubt will defer to the Poeple's Republic of China "in the interest of establishing good diplomatic relations."