893.796/357: Telegram

The Ambassador in China ( Gauss ) to the Secretary of State

2096. Department’s 1458, October 9. Discrepancy between British and Chinese statements (which, of course, was quite clear to us) continues, Chinese sources stating there is no intention to reorganize CATC into Sino-British concern and the British stating that conversations in that direction have taken place. According to British Commercial Counselor, the conversations are only in a very preliminary stage and have been no more than exploratory in regard to the question whether a Sino-British aviation concern would be advisable. His attitude toward the matter was deprecatory and he remarked that it seemed somewhat pointless as there existed no means of obtaining planes for the enterprise. We shall continue discreetly to pursue the matter.