Foreign Relations of the United States, 1947, The Far East: China, Volume VII

800.48 FRP/8–2647: Telegram

The Consul General at Shanghai (Davis) to the Secretary of State

Shanghai, August 26, 1947—11 a.m.
[Received August 26—5:09 a.m.]

2053. Par 10. 1. In accordance with comments made in Rap 70 sent Nanking as 1048, August 21, repeated Shanghai as 1404 and to Rome for Allen as 1469, changes noted in following paragraphs be made in draft agreement for China as submitted in Par 6.⁶⁸ Accordingly revised draft will be transmitted to Embassy⁶⁹ for submission in latter’s discretion to Chinese this week. Department should instruct Embassy⁷⁰ otherwise if this is not intent in ref tel as assumed here.

2. Article I, section c, will have phrase “unloading and warehousing at ports of reception in China” deleted. Article will then be identical with drafting in previously executed agreements. Department will be consulted later if Chinese assurances on points which original wording was intended to cover are not deemed adequate. UNRRA experience with supply turnover to Chinese Government at ship’s tackle or prior thereto has been most unsatisfactory and it is felt that proper safeguards to avoid past difficulties with relief supplies can only be obtained at time of negotiating agreement even though the specific conditions agreed upon are not actually incorporated on agreement.

3. Article II, section a, will read as quoted in Deptel message.

4. Section d in article II will also read as quoted in Department’s telegram. Garble in either Par or Rap message under reference does not make clear Department’s recommendation to wording of article II, section e. In draft to be presented to Chinese this will match identically similar paragraphs in Greek and Italian agreements⁷¹ although Chinese inability to live up to such a commitment is so obvious that clause would be better deleted altogether.

5. Section f in article II proposed to read as follows in view Department’s comments:

“A distribution and price control system shall be inaugurated in the major urban centers of China with the intent of insuring that all classes of the population irrespective of their purchasing power shall receive a fair share of imported or indigenously produced relief supplies. In permitting United States relief supplies made available under this agreement to be utilized in support of Chinese efforts to improve consumption and price controls, it is understood that the U. S. Government undertakes no responsibility for the success of these urban programs and reserves the right to withdraw from or postpone supply participation in any or all of them, in the sole discretion of its approved representatives.[”]

Suggest unless Department prepared to determine exact wording this section immediately that it be submitted to Chinese in above form for purposes of discussion.

6. Article III, section c will use original language “relief and work relief”.

7. Department’s assumption to article II, section d is correct. It is believed most advisable to submit this suggestion as drafted in Par 6.

Sent Department as 2053, repeated Nanking 1477. Department please repeat to Rome.

Davis

68. Telegram No. 1956, August 12, 7 p.m., from the Consul General at Shanghai, p. 1334.
69. Despatch No. 288, September 2, not printed.
70. In telegram No. 1105, September 4, 3 p.m., to the Ambassador in China, the Department agreed that the Embassy undertake negotiations with the Chinese on the basis proposed in telegram here printed.
71. The relief assistance agreement with Greece was signed at Athens on July 8; Department of State Treaties and Other international Acts Series No. 1637, or 61 Stat. (pt. 3) 3017. The agreement with Italy was signed at Rome on July 4; Treaties and Other International Acts Series No. 1653, or 61 Stat. (pt. 3) 3135.