893.00/1–3046: Telegram

The Secretary of State to the Chargé in the Soviet Union ( Kennan )17

253. Dept desires that you present the following views to the Govt to which you are accredited in such manner as you deem will be most appropriate and effective:

Current reports of discussions between officials of the Chinese Govt and the Russian Govt with regard to the disposition and control of industrial enterprises in Manchuria give concern to this Govt.

The Sino-Soviet Treaty and agreements signed August 14, 1945, provide for joint Sino-Soviet control over certain trunk railways in Manchuria, but these agreements exclude reference to any similar control over industrial enterprise in Manchuria. It is the understanding of the US Govt, which was kept informed of the course of negotiations which led up to the agreements of August 1945 and which has accepted those agreements, that exclusive Sino-Soviet governmental control over Manchurian enterprise would be limited to the railways dealt with in the aforesaid agreements. It is therefore disturbing to this Govt to receive reports that discussions are under way which might result in the establishment of exclusive Sino Soviet control over industrial enterprises in Manchuria. Under present conditions, when free access to Manchuria is not open to nationals of other powers and equality of opportunity in seeking participation in the economic development of Manchuria is denied Americans and other Allied nationals, it is felt that negotiation of agreements between the Chinese and Russian Govts with regard to industries in [Page 1105] Manchuria would be contrary to the principle of the Open Door, would constitute clear discrimination against Americans who might wish an opportunity to participate in the development of Manchurian industry, and might place American commercial interests at a distinct disadvantage in establishing future trade relations with Manchuria.

Directly related to this matter of the industries in Manchuria is the matter of reparations policy for Japan because the major portion of the industries of Manchuria were Japanese-owned prior to the defeat of Japan. This Govt considers that the ultimate disposition of Japanese external assets, such as the industries in Manchuria, is a matter of common interest and concern to those Allies who bore the major burden in defeating Japan. This Govt is now preparing a general policy outline for consideration by the concerned Govts with regard to Japanese reparations. It will be suggested that an Inter-Allied Reparations Commission for Japan be established, and that one of the primary functions of this Commission will be the final allocation of Japanese external assets among the various claimant nations. It would seem, therefore, most inappropriate at this juncture for any final disposition to be made of Japanese external assets in Manchuria either by removal from Manchuria of such industrial assets as “war booty” or by agreement between the Russian and Chinese Govts for the control of ownership of those assets.

The Govt of the US desires to be cooperative with the Chinese and Soviet Govts in seeking a solution of the problems outlined above and it hopes that the other two Govts are animated by a similarly cooperative spirit. It would therefore appreciate being informed of any discussions which the two Govts may be having or may plan to have or any action they may have taken, in regard to the disposition or control of industrial enterprises in Manchuria and we would welcome full and frank discussion of the general problem.

You may state that a similar approach has been made to the Chinese Govt.

Byrnes
  1. Same telegram, mutatus mutandi, sent to the Embassy in China as No. 261.