893.50 Recovery/7–748: Telegram

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

1242. To Department and ECA. Dr. Tung Ling, director American Affairs Department, Foreign Office, July 2 handed to Embassy officer following drafts of suggested exchange of notes to take place of Rural Reconstruction Commission Agreement. Following is suggested draft of note from Ambassador to Foreign Minister:

“Excellency: I have the honor to refer to section 407 of the China Aid Act of 1948 passed by the Congress of the US of A (hereinafter referred to as the Act) which provides for the conclusion of an agreement between China and the US of A establishing a Joint Commission on rural reconstruction in China. In pursuance of the general principles laid down in the said section of the Act, I have the honor to bring forward the following proposals regarding the organization of the Joint Commission and related matters:

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 US of A appointed by the President of the US of A 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.
The functions and authority of the Commission shall, subject to the provisions of the above-mentioned section of the Act, be as follows:
To formulate and to carry out through appropriate Chinese Government, international or private agencies in China coordinated program for reconstruction in rural areas of China (hereinafter referred to as the program).
To conclude arrangements with the agencies referred to in the preceding paragraph establishing a basis for their cooperation;
To recommend to the Governments of the US of A and China within the limits prescribed by the act the allocation of funds that [and] other assistance to the program and to recommend [Page 616] to the Government of China the allocation of such other funds and assistance as are deemed essential to the success of the program;
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; and
To appoint a citizen of China as executive director of the Commission and a citizen of the US of A as associate director and to appoint other necessary administrative staff. 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.
In respect of any decision of the Commission, the approval of the Government of China shall be obtained prior to its execution if the chairman of the Commission deems it necessary.
The Government of China agrees to grant to the American members of the Commission the privileges and immunities necessary to their effective functioning.
The Government of the US of A and the Government of China will consult with respect to problems incident to the interpretation and implementation of this exchange of notes whenever either of the two Governments considers such action appropriate.
The Government of the US of A reserves the right at any time to terminate or suspend its assistance, any part thereof, provided under this exchange of notes, and also reserves the right at any time to withdraw the US members of the Commission.
This note and Your Excellency’s reply accepting the above proposals on behalf of the Government of China will constitute an agreement between the two Governments in the sense of section 407 of the Act. Subject to the provisions of the preceding paragraph, this exchange of notes will remain in force until June 30, 1949, or, upon the request of either Government at least 2 months before June 30, 1949, until the date of termination of the economic aid agreement between the two governments concluded on July 3, 1948.”6

Following is suggested draft of reply by Foreign Minister to Ambassador:

“Excellency: I have the honor to acknowledge receipt of your note of today’s date which reads as follows: (quoting full text of Ambassador’s note)

On behalf of the Government of China, I have the honor to accept the proposals contained in the note quoted above. In recognition of the importance of the program as one of the essential means of achieving the objectives in which the Governments of China and the US of A unite in seeking under the Economic Aid Agreement between the two Governments concluded on July 3, 1948, the Government of China undertakes to afford to the execution of the program the full [Page 617] weight of its support and to direct cooperating agencies of the Government of China to give such assistance and facilities as are essential to the success of their undertakings under the program.”

Comments on foregoing being submitted in separate telegram,7 embodying views of Embassy, Moyer and Dawson.

Sent Department, repeated Shanghai 589.

  1. Signed at Nanking, Department of State Treaties and other International Acts Series No. 1837, or 62 Stat. (pt. 3) 2945.
  2. Infra.