Foreign Relations of the United States, 1948, The Far East: China, Volume VIII

893.50 Recovery/5–2848: Telegram

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

Washington, May 28, 1948—7 p.m.

810. Text draft bilateral agreement rural reconstruction follows ([re] Deptel 811⁷⁴):

Preamble—The Government of the United States of America and the Government of China:

Recognizing the importance of reconstruction in rural areas of China to the welfare of the Chinese people and considering the long record of close collaboration between China and the United States in this field, the most recent instance of which was the joint China-United States Agricultural Mission in 1946;⁷⁵ and Recognizing that reconstruction in rural areas of China should have as its purpose the improvement of economic, social and cultural conditions in those areas; and

Recognizing the intention and authority embodied in Section 407 of the China Aid Act of 1948⁷⁶ (hereinafter referred to as the Act); and

Recognizing that this agreement on rural reconstruction is predicated upon the conclusion of a bilateral agreement as set forth in Section 405 of the Act;

Have agreed as follows:

• Article I: There shall be established a Joint Commission on Rural Reconstruction in China (hereinafter referred to as the Commission), to be composed of two citizens of the United States appointed by the President of the United States and three citizens of the Republic of China to be appointed by the President of China. The Commission shall elect one of the Chinese members as Chairman.
• Article II; The functions and authority of the Commission shall, subject to the direction and control of the Administrator for Economic Cooperation,⁷⁷ and subject to the other provisions of the Act, be as follows:

  (1) To formulate, in consultation with the Governments of the United States and China, and to carry out through appropriate Chinese Government, international or private agencies in China a coordinated program for reconstruction in rural areas of China (hereinafter referred to as the program) which shall further the purposes set forth in the Preamble of this Agreement.

  (2) To conclude arrangements with the agencies referred to in paragraph (1) of this Article establishing a basis for their cooperation.

  (3) To recommend to the Governments of the United States and China, within the limits prescribed by the Act, the allocation of funds and other assistance to the program, and to recommend to the Government of China the allocation of such other funds and assistance as are deemed essential to the success of the program.

  (4) To establish standards of performance for implementation of the program and to maintain a constant supervision of all phases of the program, with authority to recommend changes in or stoppage of any phase of the program.

  (5) To consult with cooperating agencies concerning the qualifications, types and numbers of personnel to be used by such agencies in carrying out their responsibilities in the program.

  (6) To appoint a citizen of China as Executive Director for the Commission and a citizen of the United States as Associate Director and to appoint other necessary administrative staff. The appointment of key personnel of the administrative staff shall be governed, insofar as is practicable and possible, by the principle of having an American associate for each Chinese chief of an administrative unit and a Chinese associate for each American chief of such a unit. Salaries, expenses of travel and other expenses incident to the administrative functions of the Commission itself shall be paid from funds made available under Section 407(b) of the Act.

• Article III: (1) An amount not to exceed the equivalent of 10 percentum of the funds made available under subsection (a) of Section 404 of the Act may be allocated toward the support of the program. Such amount may be in United States dollars, in Chinese currency deposited by the Government of China in a special account in the Central Bank of China in amounts commensurate with the United States dollar aid extended under subsection (a) of Section 404 of the Act, or both.
• (2) All supplies imported into China for use in the program shall be free of fiscal charges, including customs duties, imposed by the Government of China.
• (3) Assistance furnished by the Government of the United States under Section 407 of the Act and pursuant to this Agreement shall not be construed as an express or implied assumption by the Government of the United States of any responsibility for making any further contributions to carry out the purposes of Section 407 of the Act or of this Agreement.
• Article IV: The Government of China undertakes:

  (1) To afford to the implementation of the program that full weight of Government support, recognizing the importance of the program as one of the essential means of achieving objectives in which the United States and China unite in giving and accepting, respectively, aid provided under the Act.

  (2) To authorize and direct cooperating agencies of the Government of China to give the necessary assistance and to facilitate action making effective such adjustments in their program as are essential to the success of their undertakings under the program.

  (3) To make available toward the support of undertakings of its cooperating agencies in the program funds and other resources necessary to carry out their responsibilities under the program.

  (4) To assure the full cooperation and support of the Provincial Governments and local officials in areas affected by the program.

• Article V: (1) The Government of China agrees to grant to the United States members and personnel of the Commission the same privileges and immunities as are enjoyed by the personnel of the Embassy of the United States of America in China.
• (2) The Government of China undertakes to extend to the Commission full cooperation, including the provision of information and facilities for observation and review necessary to the effective carrying out of this Agreement.
• Article VI: (1) The Commission shall publish in China and transmit to the Government of the United States and the Government of China, in such form and at such times as may be requested by either of the two Governments, full statements of operations under this Agreement, including a statement on the use of funds, supplies and services received thereunder, and will transmit to the two Governments any other matter pertinent to operations under the Agreement as requested by either of the Governments.
• (2) The Government of China will keep the people of China fully informed of the intended purposes and scope of the program under this Agreement and of the progress achieved by the Commission in implementing the program and it will keep the people of China continuously advised of the nature and extent of assistance furnished! by the Government of the United States pursuant to this Agreement.
• Article VII: The Government of the United States and the Government of China will consult with respect to problems incident to the interpretation and implementation of this Agreement whenever either of the two Governments considers such action appropriate.
• Article VIII: A copy of this Agreement certified by the two Governments shall be deposited with the Secretary-General of the United Nations, who is authorized to effect registration thereof.
• Article IX: This Agreement may be amended by mutual agreement between the two contracting parties.
• Article X: (1) The Government of the United States of America, reserves the right at any time to terminate or suspend its assistance, or any part thereof, provided under this Agreement, and also reserves the right at any time to withdraw the United States members of the Commission.
• (2) This Agreement shall take effect on the date of its signature. Subject to the provisions of paragraph (1) of this Article, it shall remain in force until June 30, 1949 or until the date of termination of the Agreement between the two Governments⁷⁸ entered into pursuant to Section 405 of the Act, whichever is the later date.

In witness whereof the respective representatives, duly authorized for the purpose, have signed the present Agreement.

Done at Nanking, in duplicate, in the English and Chinese languages, both texts authentic, this . . . . . day of June, 1948.

Lovett

74. Infra.
75. For correspondence on this subject, see Foreign Relations, 1946, vol. x, pp. 1268 ff.
76. Approved April 3, 1948; 62 Stat. 158.
77. Paul G. Hoffman.
78. General Bilateral Agreement signed July 3, 1948; for correspondence concerning the negotiation of this agreement, see pp. 506 ff.