840.50 Recovery/6–548: Telegram

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

1010. First discussion on draft of master bilateral aid agreement (reDeptels 773 and 774, May 24) held at Foreign Office June 4 between Embassy officers (Merchant89 and Boehringer90) and Dr. Tung Ling, director American Affairs Department, and two associates. Tung presented aide-mémoire containing following changes in draft proposed by Foreign Office:

Preamble. First and second paragraphs redrafted as follows:
“The Government of the Republic of China and the Government of the United States of America:
“Considering that it is the desire of the people of the United States of America to extend assistance to the people of China as provided in the China Aid Act of 1948: and”.
Foregoing followed by last paragraph without change.
Article II. First line: Substitute “undertakes” by “affirms its intention”.
Article III deleted with substance this article incorporated into paragraph d of article II which would then read: “To improve commercial relations with other countries and to cooperate with other countries in facilitating and stimulating an increasing interchange of goods and services with other countries and in reducing public and private barriers to trade with other countries.”
Article V, paragraph 1: Subparagraph a redrafted as follows: “The United States of America and China shall each accord to the commerce of the other immediately and unconditionally treatment no less favorable than that accorded to the commerce of any third country provided that departures from the application of such Most-Favored-Nation treatment shall be permitted to the extent that they are in accord with the exceptions recognized in the General Agreement on Tariffs and Trade adopted on October 30, 1947 by the Preparatory Committee of the United Nations Conference on Trade and Employment at Geneva. The provisions of this subparagraph shall not be construed to require adherence to the procedures specified in the general agreement with regard to the exceptions of Most-Favored-Nation treatment.”
Article V, paragraph 1: Delete subparagraph b.
Article VI, paragraph 3 redrafted as follows:
“The Government of the United States of America shall assist the [Page 543] Government of China in the carrying out of the measures contemplated by paragraph 1 to such extent as hereafter may be agreed upon between the two governments.”
Article VII, paragraph 2: Second sentence of subparagraph c changed to read:
“The Government of the United States of America shall from time to time notify the Government of China of the indicated dollar cost of commodities, services and technical information so furnished and the Government of China will deposit in the special account at such times as may be specified by the Government of the United States of America commensurate amounts of Chinese currency computed at a rate of exchange to be agreed upon between the Govt of China and the Govt of the United States of America.”
Article XIII to be deleted.

Embassy comment on foregoing proposals follows.91

Sent Department, repeated Shanghai as 450.

  1. Livingston T. Merchant, Counselor of Embassy in China.
  2. Carl H. Boehringer, First Secretary of Embassy in China.
  3. Infra.