711.9327/10–946: Telegram

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

1622. For Norton TRC from Powell.

“Have completed additional negotiations with Chinese representatives relative to inclusion of section C in route annex requested by you as result of your recent agreement with British. In response to this proposal Chinese Government negotiators agreed to accept your paragraph C of route annex and not to insist upon rate provisions.

Chinese negotiators have advised that agreement has not yet been approved by Chinese military because of inclusion of Mukden as traffic point. They have stated that if Mukden can be eliminated as traffic point at this time, it is their opinion that the agreement will be immediately approved. Chinese military feels strongly on this point that Chinese national commercial airlines are not even allowed to conduct operations into this area. Chinese negotiators have proposed that if we will agree to elimination of Mukden from body of agreement, they will be agreeable to elimination of New York and entire route No. 3 from body of agreement. They have further proposed that matter of Mukden and New York be covered in letter to be exchanged upon [signing of?] agreement including following paragraph:

‘The Govt of China appreciates the viewpoint of the Govt of the US in desiring that its carriers serve additional international traffic points in China. However, in view of present unsettled situation certain areas of China, it is not deemed practicable that such additional international traffic points be granted at this time. In addition, lack of adequate airport, customs and immigration facilities make it impossible for Govt of China to designate certain additional international traffic points. It is understood and agreed, however, that the question of such additional service will be reopened at such [time] as it becomes feasible. In any event US carriers will be authorized to serve additional traffic points in Chinese territory as soon as the carriers of any third country are so authorized and Chinese carriers will also then be authorized to serve additional points in US territory on basis of reciprocity. In this connection it is specifically understood and agreed that as soon as US carriers are authorized to serve the additional traffic point of Mukden, Chinese carriers will be authorized to serve the additional traffic point of New York on the following route: China over the Atlantic route via intermediate points in Indochina, Burma, India, Near East, Africa and Europe to New York and beyond.’

This paragraph except for last sentence is presently included in letter. What are your wishes in this matter? When replying please send copy to Shanghai.” End Powell to Norton.

[Page 1250]

Embassy desires to point out that there is no basis for believing that it will be easier to obtain Mukden as an additional traffic port in the months to come by virtue of its inclusion in letter to accompany agreement than it is now. On the contrary if Dept desires that real attempt be made to include Mukden, now is the time to do it for we are undoubtedly now in a better bargaining position than we shall be after the lines have been established and China is obtaining adequate international services. Dept will have to judge whether possible delay of some weeks which may be incurred in pressing for Mukden entailing postponement of conclusion of agreement is worth attempt to obtain its inclusion. Dept is aware that as a traffic center Mukden does not bid fair to be productive in near or intermediate future. Also it can be assumed that its inclusion will create difficulties for Chinese vis-à-vis Russians who will sooner or later like to establish a line via Mukden to Port Arthur. To the argument that inclusion of Mukden in a Sino-American treaty will not act as precedent for Russia, since we will have given China in return important counter concessions which Russia will be unwilling or unable to meet, Chinese would reply that their position vis-à-vis Russians is sufficiently weak that best means they have of resisting Russian pressure is to take position that no foreign country is permitted to overfly Manchuria or land at Mukden.

It is, therefore, desirable that decision on this point be made taking into consideration all factors and circumstances and that we be instructed accordingly.