846G.79693/1–2048: Telegram

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

150. Reurtel 131 Jan 20 and previous. Dept discussed with Powell history negotiations for agreement specifically question Hong Kong–Shanghai traffic and meaning of exchange notes on point at issue.[Page 787]Powell confirms Emb understanding stating his opinion there was complete meeting of mind during negotiations, that words “no shuttle service” in notes was clearly understood to prevent an American service operating locally and originating and terminating services Hong Kong and Shanghai not as part of through trunk route. Clearly understood that PAA could carry fifth freedom traffic on through services. Powell will provide Dept with written statement.23 Powell’s recollection was that at least one preliminary draft of notes defined meaning of shuttle service.

Dept concerned that unless Chinese can be induced argue case on basis Bermuda principles24 little progress can be made in reaching solution of problem particularly in view Chinese frame of mind and position Lin para 9 urtel 131. For Emb info Dept regrets this precedent setting case under Bermuda principles should arise in connection Hong Kong–Shanghai traffic view of unusual circumstances involved.

Failure Geneva conference25 has not modified US Govt position re fifth freedom except to emphasize importance supporting this principle existing agreements and extending, in coordination likeminded States, Bermuda type pattern.

Emb is aware Dept’s position urtel 130 Jan 20. Dept has no knowledge any official request CNAC for regional service other than Shanghai–Tokyo service and CNAC request to CAB for permit amendment to authorize Okinawa traffic stop on route to US. Understand SCAP has approved request subject two conditions one of which Dept hopes to modify as per Deptel 122 to Shanghai, Jan 22. Dept has asked Air Force not grant traffic rights Okinawa until situation re consultation clarified, believing Emb might use this as bargaining lever. Facilities Okinawa now heavily taxed but Dept believes present rights CNAC technical stop can be expanded include traffic rights without undue difficulty. Emb should notify Dept if at any time grant of traffic rights would aid in negotiations.

Dept will urge PAA take early action para 6 urtel 131.

Dept awaiting CAB comment re possibilities granting Chinese request modify route language, waiting period under rate clause, etc.

Sent Nanking as 150; rptd Shanghai as 162.

Marshall
  1. Not printed, but see telegram No. 178, February 4, 6 p.m., to the Ambassador in China, p. 788.
  2. Set forth in air agreement between the United States and the United Kingdom and Northern Ireland signed at Bermuda, February 11, 1946, Department of State Treaties and Other International Act Series No. 1507, or 60 Stat. (pt. 2) 1499.
  3. Special Conference on Multilateral Aviation Agreement of the International Civil Aviation Organization at Geneva, November 4–27, 1947.