840.50 Recovery/6–1448: Telegram

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

1082. For State and ECA. Department’s comments on Chinese proposals for revisions in master bilateral aid agreement (reDeptel 861, June 9, 6 p.m.) made available June 12 to Foreign Office which June 14 made following comments in aide-mémoire handed Embassy officer. Numbered paragraphs refer identical subjects reported Embtels 1010 and 1015 June 5 and reftel:

Re first and second paragraphs of preamble, Foreign Office “feels that it must urge the acceptance of its original suggestion. While Chinese Government fully appreciates motive of China Aid Act, [Page 550] insertion of full text of section 402 of the Act in an international agreement may not be appropriate”;
“In deference to wishes of State Department”, Foreign Office agrees to retention of word “undertakes” in article II;
Foreign Office will defer its comments on article III until it hears further from Embassy;
Foreign Office notes with satisfaction that suggested redrafting subparagraph (a) of paragraph 1, article V, is under consideration by Department;
Re suggested deletion subparagraph (b) of paragraph 1, article V, Foreign Office “wishes to stress again that commercial relations with areas now occupied by US Forces should constitute a subject of discussion at Allied Conferences and should not form part of proposed bilateral agreement. Furthermore, neither Japan nor Southern Korea included in ‘participating countries’ named in Economic Cooperation Act of 1948”;
Re suggested redrafting paragraph 3, article VI, Foreign Office, “realizing difficulties that the US Government may encounter in making any commitment in the matter, will not insist on acceptance of its proposal for revision. It is evident, however, that no action taken by Chinese Government can be effective without assistance from US Government. Insertion of article VI as drafted by the State Department will merely raise false hopes and eventual dissatisfaction on the part of Chinese public. Ministry (i. e., Foreign Office) would therefore ask State Department to consider deletion of said article”;
Re exchange rate referred to in article VIII, Foreign Office suggests that similar provisions in Sino-American Agreement on US Educational Foundation in China2 be adopted in bilateral agreement.
While Foreign Office has no intention of insisting on deletion of article XIII, it is of opinion that article is superfluous, there being provision for settlement as by arbitration in article VI of Sino-American Treaty of Friendship, Commerce and Navigation dated November 4, 1946.

Embassy comments follow in subsequent telegram.3

  1. Signed at Nanking, November 10, 1947; Treaties and Other International Acts Series No. 1687, or 61 Stat. (pt. 4) 3582.
  2. Infra.