861.77 Chinese Eastern/1184: Telegram
The Minister in China (Johnson) to the Secretary of State
[Received May 12—9:55 a.m.]
428. Reuter from Moscow today:
“Litvinoff, Soviet Commissar for Foreign Affairs, referring to China’s claim to a voice in Soviet-Manchukuo dispute over Chinese Eastern Railway, points out that Nanking Government has ceased to be actual partner with U. S. S. R. in the railway since under the Peiping and Mukden agreements China must send representative to the Board of the Railway but none has been sent for 18 months and nonfulfillment of this condition deprives Nanking Government of any moral right under the agreements.
Litvinoff referred to Sino-Soviet conflict 192936 and said that with a view to removing source of conflict Soviet negotiated with Mo Tehhui [Page 318] representing Mukden and Nanking Governments in 1930 regarding sale of Chinese Eastern Railway but Manchurian events in autumn of 1931 caused breakdown.
‘From these considerations we proposed to sell the railway and our proposal constitutes a demonstration of Soviet peacefulness.’
Litvinoff declared that Peiping and Mukden agreements did not give China right to redeem railway before the due time nor restrict rights of U. S. S. R. to sell to anyone, especially to a power actually existing in Manchuria, and carrying out the undertakings of the Chinese party in Peiping and Mukden agreements. Since China for 18 months had been unable to carry out her undertakings in Manchuria she was deprived of any moral right of protesting against sale. Litvinoff further asserted that W. [W.] Yen, the Chinese Ambassador to Moscow, tacitly admitted Chinese inability to fulfill obligations to Manchuria.”