711.9327/10–2546: Telegram

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

1738. Powell to Norton. Further negotiations with Chinese Government have brought the proposed aviation bilateral agreement to the following status:

Chinese Government has agreed to amend the description of US Route 1 in the route annex as you requested.
Chinese Government has requested the inclusion of article 12 of the Bermuda Agreement in the text of the Chinese Agreement. This article would be included as article 10 of the Chinese Agreement and contain the identical wording of article 12 of the Bermuda Agreement except that the first two lines of paragraph (A) of the article would read, “the term aeronautical authority shall mean in the case of the Republic of China, the Minister of Communications”. I believe that the real reason for the Chinese negotiators’ request for the inclusion of this article is the reported fact that the Chinese military aviation authorities are seeking to retain a substantial measure of controls over civilian aviation. I see no objection to the inclusion of this article in the Chinese Agreement.
Chinese negotiators have requested that in the exchange of letters to be made upon the signing of the agreement, the United States Government write to the Chinese Government the long letter setting forth the understanding and agreement of the two governments with respect to the temporary right to land at Peiping, the right to serve Hong Kong instead of Canton at the option of the United States Government, the right to connect the mid-Pacific service of the carrier [Page 1252] serving Route 2 at Canton, the right of Chinese carriers serving Routes 1 and 2 to connect at San Francisco and the agreement with respect to additional traffic points in China and the United States. The Chinese Government would write the responding letter setting forth the contents of the long letter and advising that it was acceptable to the Government of China. I perceive no objection, of course, to this procedure.
The controversy with respect to the inclusion Mukden has not been discussed further by Chinese negotiators and for this reason, we have not in any way indicated that we might be agreeable to the exclusion of this traffic point. It is possible, however, that this point might be raised again and in that event we are prepared to follow your instructions contained in your last radio.
The Chinese negotiators have at each of our recent conferences again brought forward their desire to include in this agreement provisions covering rates. They have taken a very strong position in this regard and state they cannot understand why we would be willing to include rate provisions in the Bermuda Agreement and not be willing to include such provisions in the Chinese Agreement, particularly when at the same time we have asked for the inclusion of the other language of the Bermuda Agreement in the Chinese Agreement. This is the position I advised you I was afraid they would take when we asked for the inclusion of part of the Bermuda language respecting Fifth Freedom traffic. The Chinese negotiators state that this is the only point in the agreement that remains to be negotiated. I believe that since we have made the joint announcement concerning the agreement with Britain with respect to the inclusion of the language from the Bermuda Agreement in other bilateral agreements and have requested the Chinese Government to accept this, it will now be necessary for us to concede their point to them and write into the Chinese Agreement the language contained in section 2 of the route annex of the Bermuda Agreement. I would like your instructions on this point.
On or about September 14 the agreement was finally approved by the Ministry of Communications and forwarded to the Executive Yuan for its final approval and signature. The Executive Yuan returned the agreement to the Minister of Communications with the recommendation that he forward it to the Minister of Defense42 for his consideration and recommendations. This was done and the Ministry of Defense held the agreement up for more than a month. We finally succeeded in getting the Ministry of Defense to return the agreement to the Ministry of Communications with its recommendations. [Page 1253] We are advised that the Minister of Defense has recommended that no agreement be signed at this time because (1) the Chinese Government does not have adequate civilian airports for use by international carriers in flying the proposed routes, (2) the Chinese Government does not have an effective civil aeronautical regulatory body set up and functioning and (3) the proposed international commercial air transport operations would interfere with the Government’s war efforts in Northern China and might lead to some international incidents. The Minister of Communications has advised that he does not agree with these recommendations and has taken the position that the agreement should be signed at this time if it can be negotiated to the satisfaction of the Chinese Government. The Minister of Communications has further advised that the agreement and his recommendations as well as those of the Minister of Defense have now gone forward to the Executive Yuan and to the Generalissimo43 for final approval. We have been told that President of Executive Yuan, T. V. Soong, disposed to approve the signing of the agreement and the Minister of Communications has advised that he will personally see the Generalissimo about the matter as soon as possible. The Generalissimo is now in Formosa and will not return to Nanking until sometime next week. There is no way to estimate how much time will be consumed in these final steps but we have been advised that there is a possibility that it could be completed within 2 weeks. [Powell.]

Sent Department as 1738; Department please repeat reply to Shanghai.

  1. Gen. Pai Chung-hsi, Chinese Minister of National Defense.
  2. Chiang Kai-shek, President of the National Government of the Republic of China.