761.93/8–1545
Memorandum by the Director of the Office of Far Eastern Affairs (Ballantine) to the Secretary of State 24
Mr. Secretary: Soong should be in Washington on Friday, the 17th, or shortly thereafter. He will no doubt wish to have a talk with the President and you as soon as possible.25
Soong will of course report on his recent negotiations with Stalin. You may wish to point out to him, not as a matter for criticism but as a matter of fact, wherein the Moscow agreement is believed by us to go beyond the Yalta commitments. For example: the provision for leasing half of Dairen port facilities to the Soviet and for a Russian port master at Dairen are not in accord with our interpretation of what was intended in the Yalta commitment for an internationalized free port; and the provision for a military zone, in connection with the naval base at Port Arthur, extending almost to the boundaries of the former Russian leased territory on the Liaotung peninsula, is at variance with the spirit and letter of the Yalta commitment in that it reestablishes in fact, if not in name, the old Russian leasehold which President Roosevelt is understood to have opposed at Yalta.
With regard to the period of the Moscow agreement, it might be mentioned to Soong that 15 or 20 years would have been more in conformity with the spirit of the Yalta commitments than the agreed period of 30 years and would have brought the agreement in line with the U.S.S.R.’s mutual aid agreements with the United Kingdom and France. Furthermore, it will be recalled that the Soviet Union is committed in its 1924 treaty with China to return the Russian built railroads in Manchuria to China free of charge in 1963–64.
Soong should be made aware in unequivocal terms of our concern regarding the threat of civil war in China. Our concern can be related to the reported provision in the Moscow agreement regarding the Soviet Union’s undertaking to give moral and material support solely to the Chinese National Government. You may wish to point out to Soong that the Russian commitment in no sense lessens the Chinese Government’s responsibility to exercise restraint in dealing with the Chinese Communists and to seek a solution of its internal political difficulties through peaceful means, or its responsibility to liberalize internal political administration and effect needed reforms. The Communist movement in China derives its strength from the Chinese peoples’ dissatisfaction in general with the illiberal and unprogressive [Page 976] administration of the National Government and in particular with the Government’s failure to alleviate agrarian distress. The only practical manner in which to meet the challenge of the Communists is through progressive reforms—not suppression by force of arms.
We desire close political and economic collaboration with the Chinese Government—with a Chinese Government which has a strong appeal to the democratically-minded people of the United States. We will exert every effort to prevent developments in China from becoming a source of irritation in our relations with the U. S. S. R. and we hope to have the cooperation of the Chinese Government in this connection.
Soong will unquestionably also wish to discuss matters connected with the financing of China’s economic reconstruction. It is suggested that he be referred to Secretaries Vinson and Wallace.26 In as much as he will be visiting London he can also arrange to discuss these matters there with Assistant Secretary Clayton.27 You may wish to inform Soong in general terms of our sincere concern that China adopt liberal measures and pursue a cooperative course with respect to American and foreign commerce with China and business activity in China, and that in the matter of economic reconstruction, the basic problem of agrarian reform should receive active attention. Specifically, we are interested in the adoption by China of business laws and regulations and investment policies which will encourage rather than stifle commercial relations between American and Chinese nationals.
- Drafted by the Chief of the Division of Chinese Affairs (Vincent).↩
- No record found in Department files of such conversations with Dr. Soong while he was in Washington.↩
- Fred M. Vinson, Secretary of the Treasury, and Henry A. Wallace, Secretary of Commerce.↩
- William L. Clayton, Assistant Secretary of State for Economic Affairs.↩