Memorandum 81 to General of the Army George C. Marshall, Special Representative of President Truman to China 82

General George C. Marshall: In the treaty for the relinquishment by the United States of extra-territorial rights in China, signed January 11, 1943, the United States and China agreed to enter into negotiations for conclusion of a modern commercial treaty “upon the request of either Government or in any case within six months after the cessation of the hostilities in the war against the common enemies …”82a

Pursuant to this agreement the Department presented to the Chinese Government through the Embassy at Chungking on April 2, 1945 a draft treaty of friendship, commerce and navigation. Subsequently, this draft was the subject of correspondence between Mr. Clayton and Dr. Soong when the latter was in San Francisco (Mr. Clayton’s letter of May 22 and Dr. Soong’s reply of May 25). In conversation with Mr. Clayton in Washington a few days later, Dr. Soong named Dr. Kan Lee of the Chinese Embassy to discuss informally with officers of the Department provisions of the draft treaty. These conversations were completed on July 9. Following them Dr. Kan Lee went to Chungking to discuss the draft with various Chinese ministries. The Department had previously agreed, at the suggestion of the Chinese Government, to conduct the negotiations in Chungking.

Developments in the Far East make the early consummation of the treaty of major importance to both the United States and China. American business organizations are extremely anxious for a definite and satisfactory legal basis on which to pursue trade and investment interests. From the standpoint of China, it would seem that early consummation of the treaty would enhance its prestige, particularly by demonstrating to the world the validity and significance of the recent extraterritoriality relinquishment by the Powers.

[Page 1326]

The Department believes that it would be very useful if you express to Generalissimo Chiang Kai-shek83 the substance of the foregoing and in particular the great importance which this government attaches to the earliest possible consummation of the treaty.

In addition to concern with regard to early consummation of a comprehensive commercial treaty, American business interests are becoming increasingly disturbed with regard to the projected “Company Law” in view of the fact that it may become a law on January 1 in its present form. The Department shares their feeling of concern and feels that it may serve a useful purpose if you could bring to the attention of the Generalissimo the Department’s interest in this matter as outlined in the attached memorandum.84

  1. Prepared in the Division of Commercial Policy and approved for transmission to General Marshall by the Assistant Secretary of State (Thorp).
  2. General Marshall had the personal rank of Ambassador.
  3. Omission indicated in the original memorandum.
  4. President of the National Government of the Republic of China.
  5. Dated December 7, p. 1252.