Office of the Historian

893.50 Recovery/7–948: Telegram

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

Washington, July 9, 1948—7 p.m.

1012. From Ramsey, OFLC Re Embtel 1232 of July 6 and SFLC secret 2948.21 This message has the concurrence of all interested offices of the Dept. It is Dept view that contract provides no terminal date; contract ends only upon termination of declarations by owning agencies. It is however clearly in interests of all parties concerned that mutual agreement now be reached on date for completion of declarations. Owning agencies have informally suggested date between [Page 713] Sept 30 and Dec 31. Dept conferring with owning agencies to establish earliest possible date; will advise.

With regard to dates referred to in paragraph a, article 3, of agreement, Charles Kendall, formerly General Counsel,22 in recollection of negotiations prior to signing of the agreement, supports our position as set forth above and our further position that such dates concern only the limitations of time imposed upon China for the removal of property, subsequent to its having been declared and made available, and have no reference to time limits to be met by owning agencies in making declarations or by FLC in serving notices of availability.

Appreciate your difficulties in view of positive action taken by Bosey as indicated by GFLC 603423 and 603724 and by FO letter cited in Embtel 1232. However, we cannot accept unilateral action of China in setting 30 June as termination date. Your reply to FO should set forth clearly above principles and during any subsequent negotiations on this issue you must continue to be governed by earliest date reported acceptable to owning agencies.

Dept suggests that no representative be now appointed for negotiation with FO on possible underrun. Consideration being given to treatment of Chinese claim for underpayment on yuan debt and alleged surplus underrun in relation to overall lend-lease and war account settlement. Will advise later regarding preferred method and place of negotiation such matters.

Above referenced Guam cables will be subject to separate dispatch soonest.

This message has been repeated to Shanghai 1244 for Luboshez OFLC and to OFLC Guam for info. [Ramsey.]

Marshall
  1. SFLC 2948 not found in Department files; it originated in the Shanghai office of OFLC.↩
  2. Of OFLC.↩
  3. Not found in Department files; it originated in the Guam office of OFLC.↩
  4. Dated July 6, not printed; it reported the Bosey Office in Guam had returned notices of availability to the OFLC Guam Office (893.24 FLC/7–648).↩