761.9327/9–2948: Airgram
The Consul General at Shanghai (Cabot) to the Secretary of State
[Received October 5.]
A–891. Following is UP release datelined Nanking, September 28 which, appeared local press:
“SSAC Directors Meeting Is Now Deadlocked.”
“Central News reported today that the Sino-Soviet Aviation Compay’s directors, meeting at Alma Ata is now deadlocked on a disagreement over the personnel problem.
“It said that consequently the 1939 Sino-Soviet air pact will expire as scheduled on September 9 next year. The aviation company created under the pact shall be dissolved.
“The Chinese Government already has notified Soviet Russia of its desire to terminate the pact, but the Soviets requested renewal or conclusion of a new pact. The personnel deadlock apparently has decreased hopes of a renewal.
“Chinese quarters regarded the Sino-Soviet airline as the “Sinkiang appendicitis”, which they alleged the Soviets are employing as an avenue of exploitation.
“Though the airline is owned by the Soviets and the Chinese jointly on a 50–50 basis, it is virtually completely controlled and run by the Soviets, with a predominantly Soviet staff.”