611.9331/8–3045: Telegram

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

1471. In order to safeguard and promote United States investment and trade interests, the Embassy strongly recommends that the Department of State and the Department of Commerce give every assistance [Page 1353] to the earliest possible sending of representatives of American business to China. On July 26 a Swiss economic mission, representative of that country’s manufacture of such goods as locomotives, dynamos and electric machinery, arrived in Chungking to visit industrial plants here and to discuss plans for postwar trade. On August 25 the Central News Service reports that more than 10 Soviet industrial and mining experts have arrived here from Moscow by plane recently. They reportedly will hold formal discussions with the War Production Board and Ministry of Economic Affairs in the near future concerning Sino-Soviet operations in industrial and mining enterprises.

The possible significance of the treaty recently concluded between Russia and the Government of China36 with respect to increasing economic collaboration between these two countries cannot be minimized, especially in view of the fact that Chinese resources for potential industrial expansion are in large part located in Manchuria and North China. In these areas, as in other parts of China, the strongest possible representation of American economic interests will be required, both by representatives of private enterprise and by Foreign Service officers qualified by experience to report on economic developments, and energetic in representing the interest of the United States.

It goes without saying that steps should be taken at the earliest possible time to establish direct air and sea transportation open to commercial travelers and cargo between China and the United States. At the present time, it is to be noted that the British are giving No. 1 priorities for air transportation from India to London to Chinese industrialists seeking to go abroad to conclude contracts for textile machinery and other necessities for postwar reconstruction. The Embassy is informed that the British are also quoting prices for postwar delivery c. i. f. any China port. The advantage which British commercial concerns and representatives in China have enjoyed by virtue of being able to secure exchange through the British Embassy has already been reported on.

The Minister Counselor of Economic Affairs37 has conferred directly with General Wedemeyer38 on the matter of granting theater clearance to American business representatives coming to Chungking. General Wedemeyer has been most cooperative in revising the situation existing in earlier months when it has been true that only American [Page 1354] nationals (and Chinese) were required to get such clearance before entering this theater. In practice it has been agreed that the army authorities will now refer requests for theater clearance from representatives of American business to the Embassy for its approval and will grant such clearance for persons approved by the Embassy, with the understanding that the army will assume no responsibility for providing transportation.

In the immediate future all military facilities within China will be critically needed in the transportation of military occupational forces. No civilian requests for transportation will be considered except in the cases of those whose services are considered essential to the civil administration of areas taken over from the Japanese. For instance, headquarters has approved (see Embstel 146339) and stated that it would assist in exploiting, the prompt arrival of Lerney M. Pharis, vice-president and general manager, Shanghai Power Company. Headquarters has also advised the British Embassy that it would endeavor to provide transportation for a party of 10 British technicians who were formerly employees of the water works in Shanghai.

Various American companies such as Standard Oil, Texas Company and the William Hunt Company have been seeking the Embassy’s assistance in arranging for earliest possible return of staffs to coastal areas. Undoubtedly other requests for sending personnel of American enterprises will also be received by the Department. The Embassy will endeavor to maintain the closest liaison with the army authorities here and advise the Department promptly of information necessary to expedite the arrival of key American business personnel when the military situation has been clarified.

The Embassy would appreciate being informed if the China-America Council of Commerce and Industry intends to go forward with its understood plan to establish an office in China and whether that group or the National Foreign Trade Council is making any plans for sending to China an influential mission representative of U. S. trade and business interests.

  1. Treaty of friendship and alliance signed at Moscow, August 14, Department of State Bulletin, February 10, 1946, p. 201; United Nations Treaty Series, vol. 10, p. 300; or Department of State, United States Relations With China (Washington, Government Printing Office, 1949), p. 585.
  2. Walter S. Robertson.
  3. Lt. Gen. Albert C. Wedemeyer, Commanding General, United States Forces in the China Theater and Chief of Staff, China Theater.
  4. Dated August 29, not printed.