The Secretary of State to the Embassy in China
170. 1. As Chinese Govt has assumed administration and control of International Settlement at Shanghai and as such action does not in our view appear to be incompatible with provisions of Article 3 of Sino-American treaty of 1943, we feel that approach to FonOff along lines of British note is inadvisable (Urtel 127 Jan 18, 8 a.m.) and would serve no useful purpose. We do feel, however, that having taken over Settlement Chinese Govt should make prompt provision for assumption of official obligations and liabilities of Settlement and that US and other treaty powers concerned should be consulted with regard to satisfactory and just settlement of this problem. (Sent to Chungking repeated to Shanghai.13)
2. Dept accordingly desires, unless objection is perceived, that Emb address note to FonOff along following lines: Refer to Articles 2 and 3 of Treaty of 1943 on subject of Diplomatic Quarter and International Settlements at Shanghai and Amoy. Say in this connection that Govt of U S has noted “Measures for Taking Over Concessions, Settlements and Peiping Legation Quarter” and “Organic Regulations of Liquidation Commissions for Official Assets and Official Obligations and Liabilities of Settlements and Concessions and Peiping Legation Quarter” promulgated by Chinese Govt. State that while US Govt does not desire at this time to enter into discussion of appropriateness of above-mentioned Measures and Regulations, it wishes to reserve all US rights with respect to reversion of International Settlements and Diplomatic Quarter pursuant to pertinent provisions of Treaty of 1943. Point out that US Govt expects that Chinese Govt will consult with it and Govts of other concerned powers particularly with a view to reaching at early date of a mutually satisfactory and fair agreement in regard to assumption and discharge by Chinese Govt of official obligations and liabilities of Settlements and Diplomatic Quarter.
3. Telegraph date and text of note presented to FonOff.14
4. As telegraphed texts Urtels 2246 and 224715 received in garbled condition, please air mail texts to Dept.