811.42700 SE/8–1947: Telegram

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

1743. ReDeptel 939, July 30, 6 p.m. Having made little progress in dealing with the Vice Minister of Foreign Affairs23 on differences of opinion concerning the draft agreement to implement the Fulbright Bill, an officer of the Embassy discussed the matter with the Foreign Minister. He at once and without argument completely reversed Foreign Office position on the major points. He offered, on his own initiative, to agree that the name of the foundation should be U. S. Educational Foundation in China. He then expressed complete [Page 1283] agreement with the American viewpoint on the composition of the Board of Directors and agreed that the Foreign Office would strongly support, with the Minister of Finance, the American proposals on the exchange rate to be used. The only request he made was that U. S. make concessions on the articles involving freedom from taxation and other similar immunities. He justified this request on the grounds that the Legislative Yuan would probably refuse to recognize any agreement which would restrict its freedom of legislation on such subjects.

The Embassy feels strongly that since the Foreign Office has agreed to all the major points which we desired, that the U. S. must be prepared to make concessions on relatively minor points such as those mentioned above.

The Minister, in conclusion, stated that he would instruct the Vice Minister and Chief of American Section24 to straighten out all minor points with Embassy within 1 week. Embassy inclined to believe, however, that the exchange rate question, since it involves several other agencies of the Chinese Government may yet cause a little difficulty and postpone final agreement, somewhat beyond the limit of 1 week proposed by the Minister.

  1. Liu Shih-shun.
  2. Tung Ling.