711.9327/3–1948: Telegram

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

494. Merchant and Jarvis met with Chinese national [a.m.] March 18 on requested consultation re bilateral air agreement. Lin, director International Relations Department, Ministry Communications, headed Chinese group composed of representatives CCAA, Department Navigation and Civil Aviation, Ministry of Communications, and Foreign Office. Lin trotted out arguments he had previously advocated and earlier reported to Department. Lin eventually settled on argument re sovereignty of Kowloon as most important for Chinese case. He did not emphasize at length difference in Chinese characters end [in?] word “shuttle” in paragraph b of notes exchanged at time signing of agreement but strongly endeavored sell idea that US could refrain from Fifth Freedom carriage between Hong Kong and Shanghai, view it as cabotage and, as far as other nations are concerned, not impair US Fifth Freedom policy.

After Lin’s opening statement, Chinese were handed informal statement of US position on points raised in Chinese note prepared in accordance Department’s instructions, and containing abstract of Powell’s statement. Chinese were informed that all arguments Chinese had informally advanced had been reported to Department, had been thoroughly considered, and therefore this statement represented final US position. Merchant informed the Chinese that the instructions which he had received from his Government were inflexible and final.

Lin, during course discussion, stated Chinese Government policy on this matter firm and that if US not prepared to cease movement Fifth Freedom carriage on this segment its route, there would be serious “consequences”. Upon inquiry as to what these “consequences” would be, Lin did not elaborate. When Lin was informed Chinese should discuss with British and not with US matter of US right to operate into and out of Kaitak (Kowloon), Lin said China properly should discuss this subject directly with US as China firmly maintained that this was “cabotage” or carriage within sovereign Chinese territory and hence concern solely of Chinese. Lin was thereupon asked if it was not true on basis his position that China was granting UK cabotage rights between Kowloon and Shanghai. Reply was unresponsive and this may prove best hook on which to impale Chinese argument.

Lin most insistent Department be requested further consider status of Kowloon and Chinese position that carriage between Kowloon and [Page 792] Shanghai in effect cabotage. Merchant reluctantly agreed to wire Department but informed Chinese that he knew there was no hope Department could or would change position outlined in statement which had been handed to Chinese.

Embassy continues fully to concur in Department’s position and would welcome early reiterative instruction. Risks well worth running in maintaining obdurate position, appear to be that (a) Chinese accepting but then making operation practically impossible by administrative actions in which case Embassy believes remedy would lie in immediate representations to Foreign Office or (b) Chinese refusing to accept our interpretation and throwing matter through disputes article to ICAO28 council in which event US case appears so strong on merits as to insure favorable decision.

Sent Department 494, repeated Shanghai 200.

  1. International Civil Aviation Organization.