811.79693/8–3046: Telegram

The Acting Secretary of State to the Ambassador in China (Stuart)

708. For attention Powell. Proposed air agreement with China discussed with CAB (Your 1404 Aug 30). Dept and CAB not convinced necessity omitting all traffic points in Manchuria but rather than sacrifice agreement would be willing have route 1 read: “US over Pacific route to Mukden, Dairen, Tientsin, Nanking, Shanghai and beyond.” This omits Harbin, Peiping and Hangchow, with further possibility we may not be able get into Dairen now.

In return for giving up Harbin and possibly Dairen this time, we would want Chinese assurance (probably through separate exchange notes) we could reopen matter future suitable opportunity, and in any event US air services could get similar rights at Harbin and Dairen whenever such were accorded to air services of any third country.

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CAB still wants retain privilege re our carriers on routes 2 and 3 having option serve Hong Kong or Canton, and if Chinese agree to this we should revise final provision concerning such optional privileges to omit “from and to Shanghai” to avoid possible ambiguity. However rather than sacrifice agreement CAB willing return to original Pacific case route pattern which would put Hong Kong on route 2 and Canton on route 3 without optional interchange.

Introductory para our routes should clearly state “via intermediate points in both directions”.

There should be final clause in US section of route annex reading “On each of the above routes the airlines authorized for such route may operate non-stop flights between any of the points on such route, omitting stops at one or more of the other points.”

This is for primary purpose permitting direct Tokyo-Shanghai service and also Tokyo–Seoul–Shanghai service on route 1 at same time permitting other schedules via Mukden, Tientsin, Nanking on inland route.

This Govt unable accept general limitation each US route to only one traffic point in China. However, if Chinese insist on routes 2 and 3 serving Hong Kong and Canton separately and respectively, route 2 would serve only Shanghai (in China) and on same basis route 3 would serve only Canton and Shanghai. Route 1 would serve only Shanghai on direct service from Tokyo terminating in Manila, but the inland service from Tokyo via Mukden, Tientsin, etc. would of course serve several Chinese cities. We do not desire serve Kunming (mentioned Your 1404 Aug 30) but if we confined proposed inland route via Mukden, Dairen, Tientsin and Nanking to one stop, such route would have little value.

Your 1404 Aug 30 indicates prospects early conclusion agreement. Before authority can be given for Ambassador to sign, Dept requires full text for prior approval. You should therefore telegraph references to and sequence of articles and provisions in Chicago standard form and Bermuda or Belgian agreement which Chinese have already accepted and also any additional articles when they are tentatively agreed upon, as well as revised text US route annex and Chinese route annex.