893.50 Recovery/6–1548: Telegram

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

1087. For Dept, ECA and Agriculture. Subject: Rural Reconstruction Commission Agreement. (Recent references Deptel 828, June 3, 11 a.m., Embtel 1022, June 7, 5 p.m. and Embtel 1052, June 10, noon).

On June 10 Foreign Office explained to Embassy Chinese Govt unable to accept language in draft agreement submitted June 3 which cites in article II Commission is subject to direction and control of the administrator and then proceeds to provide that it will “formulate” and “carry out” a coordinated program for reconstruction. Foreign Office pointed out with considerable logic that this places Chinese Govt in position of being creature of Mr. Hoffman insofar as rural reconstruction is concerned.

Lapham and Embassy agree that draft should be changed to meet Chinese legitimate point of sovereignty. Accordingly approval is requested for following redraft first paragraph article II which would then read as follows:

“The functions and authority of the Commission shall, subject to the provisions of the act, and in particular article 407 thereof, be as follows:

(1) To formulate in consultation with the Govt of US and China and recommend to the Chinese Govt the execution, through appropriate Chinese Govt international or private agencies in China of a coordinated program, et cetera.” Balance of article unchanged.

Approval is also requested for insertion into draft of following new article IV, subsequent articles to be appropriately renumbered.

“Article IV: In formulating its program the Commission shall have authority, in consultation with the appropriate agency of the Govt of China, to consider and make recommendations on the following:

A coordinated extension-type program in agriculture, home demonstration, health and education, for initiation in a selected group of hsien in several provinces to include a limited number of projects suited to conditions of the areas where the program is developed, in such fields as agricultural production, marketing, credit, irrigation, home and community industries, nutrition, sanitation and education of a type which while [will] facilitate the promotion of projects being undertaken in the program.
A definite progressive program of enforcement, in areas where the program is carried out, of the pertinent features of existing legislation and decrees related to land tenure, and of efforts to collect land taxes on a fair and equitable basis.
Progressive steps in a program to survey, register and appraise the agricultural land in areas where this program is carried out.
Progressive steps in a program to carry out the provisions of the constitution relating to the local government’s system of the hsien in areas where this program is carried out.
Subsidiary projects in research training and manufacture, to be carried out in suitable locations to provide information, personnel and materials required by the program.
A program to put into effect over a wider area than provided for in the coordinated extension type program, and of the above projects which can be developed soundly on a larger scale, of which examples might be the multiplication and distribution of improved seeds, the control of rinderpest of cattle, the construction of irrigation and drainage facilities and the introduction of health and sanitation measures.
Related measures, in line with the general objectives of this program.
The distribution of assistance in this program, on the principle of giving due attention to strengthening rural improvement in areas where selected projects can be progressively developed and where their development will contribute most effectively to the achievement of purposes for which this program is undertaken, but that the principle of distributing aid will not be controlled by proportionate or geographic consideration per se.”

Beyond statement of Foreign Office on article II reported above, Embassy has not received additional comments from Chinese stated to be forthcoming. Embassy believes requested re-draft of article II will be acceptable to Chinese.

Instructions will also be appreciated re points raised in Embtels 1022 and 1052.

Sent Dept 1087, repeated Shanghai 482.