893.796/158: Telegram

The Acting Secretary of State to the Minister in China (Johnson)

247. Pan American Airways informs Department that, following its purchase last March of 45 per cent interest in China National Aviation Corporation, it attempted, through its wholly owned subsidiary, Pacific American Airways, to inaugurate, under a subcontract from the China National, a postal service between Shanghai and Canton but that project failed due to certain unreasonable demands of Minister of Communications following pressure upon the latter from the Sino-German Eurasia Company which is aggressively interested in obtaining similar rights for air service.

Department wishes to ascertain whether the local representative of Pan American Airways has kept the Legation and/or Peck fully informed concerning the plans of his company and whether, in the opinion of the Legation and Peck, it would be appropriate and practicable and whether any useful purpose would be served by the Department and/or Legation making to the appropriate authorities of the Chinese Government either formal or informal representations on behalf of the American interests concerned.

If response to this instruction necessitates conference with the local representative of Pan American Airways, it should be impressed upon him that he is being approached in strict confidence.