893.24 FLC/8–1748: Telegram

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

1226. (From Hyssong OFLC) Further Deptels 1111 and 1012 and Embtel 1523. Department believes that as soon as possible after Luboshez’s return, conferences concerning surplus bulk sale agreement should be resumed at high diplomatic level. Luboshez should act as delegate. Eta28 Shanghai Monday, 30 August.

If possible, agenda should be confined to following points:

Acceleration of removal of surplus from islands either by return to China or by sale elsewhere.
Mutual agreement that FLC will present and China will accept all notices of availability of property declared surplus not later than a definite date still under negotiation with owning agencies. Anticipated date is 31 October; however, Embassy will be advised later after definite date has been agreed to by OFLC and owning agencies. If China so desires, it is agreeable to Department to set later date for notices covering scrap, provided further agreement is reached that for any scrap not removed by some definite date (to be negotiated) title will revert to U. S.
Firm determination of China’s intentions regarding disposition property on certain islands where China has to date indicated no [Page 716] intention of taking action, although title has passed under terms of Article 2a of agreement.
Luboshez advises that Embassy believes fair chance exists getting agreement by China that no claim will be made under disparity clause of agreement, by considering that U. S. will have generally fulfilled its obligation by having made available to China all of the surplus property located in the areas covered by such agreement. Department not optimistic re Chinese agreement, but if such is your belief, Department agrees strong attempt should be made settle that issue on that basis. For Embassy’s info only, if waiver [of] warranty clause not obtainable foregoing basis, Department anticipates bargaining for waiver in course negotiation settlement war obligations. If China attempts to bring figures into disparity discussion at this time, Department believes it may be resisted on grounds such figures can never be accurately determined and cannot even be estimated until all removals have been completed. [Hyssong.]

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