Memorandum by the First Secretary of Embassy in China (Ludden) to General Wedemeyer 51
The Soviet position at Dairen and Port Arthur52 rests upon agreements concerning the two cities which form annexes to the Treaty of [Page 678] Amity and Alliance between China and the Soviet Union of August 14, 1945.53
[Here follows summary of situation.]
The Russians, realizing the weak political and economic position of the Chinese as well as the probable fact that neither the United States nor any other nation is prepared to and can legally intervene actively in the situation, are prepared to treat with the Chinese regarding the Naval Base area on a “take it or leave it” basis.
At the present time the Chinese Government seems not prepared to accept any settlement which would further impair Chinese sovereignty in the area. The Chinese Government is furthermore unwilling to acquiesce in the continuation of a Soviet-sponsored local administration with a strong Communist flavor in which the Chinese would have little, if any, influence outside the city of Dairen.
The Chinese Government may feel that a small foothold in Dairen would be worth considerable concessions to Soviet demands; it may even be able to overcome Soviet objections to the extent of appointing its own officials in the so-called Kwantung Government as well as in the city of Dairen. As long as the present Soviet attitude continues, however, and as long as the Russians keep a large garrison in the area, control the local administration, and successfully prevent the entry of Chinese troops or a sufficiently large body of police, Chinese sovereignty in the area as a whole will probably be little more than nominal, and even within the city of Dairen will be restricted.
[Here follow further details.]