661.9331/2–1649: Telegram

The Minister-Counselor of Embassy in China (Clark) to the Secretary of State

[Cantel] 50. Chen Tai-chu, director American section Foreign Office, gives me following on Sino-Soviet commercial agreement negotiations, Deptel 215, February 15 to Nanking, repeated American Embassy Canton 10. At time Soviet withdrawal Manchuria, they approached Chinese re negotiation Sino-Soviet commercial agreement which would deal mostly with trade between northwest provinces and Soviet Union. Negotiations that time broke down over question war booty and matter lay dormant until just prior move Government Canton when Soviets reopened issue. Chen surprised Soviet move this time yet authorized Chang Chih-chung explore possibility in northwest. Chen insists matter is still in exploratory stage and has promised keep me informed. I expressed hope he would bear in mind China obligations under our 1946 treaty when negotiating with Soviets.

Chen avoided my specific questions re mineral rights, contenting himself with saying treaty, as envisaged, would deal mostly with trade. I assume therefore that mineral rights are involved.

Sent Department 50, repeated Nanking 50.