893.50 Recovery/6–2448: Telegram

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

1138. Is Embassy’s assumption correct that conclusion rural reconstruction agreement is not required prior to July 3? (Reference Deptel 907, June 22, 6 p.m. received June 24, repeated Shanghai 1115). Apart from fact Moyer absent in South China with Stillman group until June 30, complications now visible negotiating this agreement render it desirable in Embassy’s opinion to lay it aside until bilateral is concluded. In light unacceptability to Department and ECA of substitute language proposed by Embassy for paragraph 1 of article II, real possibility believed to exist that conclusion of any agreement with Chinese on rural reconstruction commission will prove impossible. Weak position of Wong Wen-hao’s Cabinet coupled with Legislative Yuan’s avid search for any clubs with which to beat him gives rise to this uncertainty. Moreover one must admit that in drafting section 407 Congress overlooked [in] choice of language traditional and understandable Chinese sensitivity on subject of sovereignty.

Legislative Yuan attitude described above underlay Foreign Office’s use of word “inconvenient” reported in Embtel 1052 June 10 and queried in Deptel 878 June 14.

Embassy has made clear throughout [that] draft agreement submitted to Foreign Office continuously subject to modification and change by us in language and substance. [If] feasible defer rural reconstruction negotiation until after bilateral concluded and if latter agreeable to Legislative Yuan in form of executive agreement, then question may not arise of altering rural reconstruction form to exchange of letters. Regarding legality of latter, Foreign Office has orally assured me that exchange of letters is equally binding on Chinese Government as an agreement in form we originally proposed. Moreover Foreign Office has promised us statement this effect in writing. However, Embassy holds some doubts as to ability of anyone at this early stage of Chinese operation under new constitution as yet legally unconstrued to give categoric assurance on this point.

Sent Department 1138, repeated Shanghai 521.