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[Page 1056]

249. National Security Decision Memorandum 1881

TO

  • The Secretary of State
  • The Secretary of the Treasury
  • The Chairman, NSC Under Secretaries Committee

SUBJECT

  • PRC Blocked Assets and Private Claims

The President has approved the Under Secretaries Committee recommendation contained in its memorandum of January 13, 19722 concerning the settlement of PRC blocked assets and private claims. Specifically, the President directs:

  • —That the United States should explore first, with the People’s Republic of China, a lump sum settlement of the claims of American citizens for property nationalized by the PRC, to be paid either as a single payment in full or in annual installments over a period of years, in return for which the U.S. would unblock all PRC assets.
  • —That if the foregoing course proves non-negotiable, the U.S. should propose a settlement under which it would retain the blocked assets now under its control using them to compensate U.S. citizens for properties nationalized by the PRC.3

The President has directed that the Secretary of State, in cooperation with the Secretary of the Treasury, should prepare a negotiating [Page 1057]scenario based upon the foregoing decision which should be submitted for his approval by September 15, 1972.4

Henry A. Kissinger
  1. Source: Washington National Records Center, RG 330, OSD Files: FRC 330 77 0094, China (Reds) 092, 1972. Secret; Nodis; Homer. Copies were sent to Laird and Helms.
  2. Document 185.
  3. The administration issued one more NSDM related to China in 1972. NSDM 195, October 30, reads in part “The President has considered recommendations of the Under Secretaries Committee in its memorandum of January 13, 1972 and decided that Transportation Order T–2 should be amended to permit U.S. flag-vessels and U.S.-registered civil aircraft having a validated license from the Department of Commerce to visit the People’s Republic of China.” (National Archives, RG 59, General Files on NSC Matters: Lot 73 D 288, NSCU/SM Memoranda, 1972) This information was passed to Watson in telegram 209488 to Paris, November 16. (Ibid., Central Files 1970–73, POL CHICOMUS)
  4. In a September 29 memorandum to Nixon, U. Alexis Johnson, signing for Rogers, provided both negotiating instructions, which he noted had been approved by the Secretary of the Treasury, and a list of potential members of a delegation to meet with PRC representatives. (Ibid., Nixon Presidential Materials, NSC Files, Box 526, Country Files, Far East, People’s Republic of China, Vol. 5) In an October 26 memorandum to Kissinger, Hormats and Holdridge suggested that he approve a cable to Watson instructing the Ambassador to approach Huang Chen about holding “a general exchange of views on this problem.” The United States hoped to avoid discussing individual cases early in the negotiations. (Ibid., Box 529, Homer, USPRC Negotiations, Paris) After being approved without change by Kissinger, telegram 198579, November 1, relayed the instructions to Watson. After presenting the U.S. proposal to Huang Chen, Watson reported in telegram 21031 from Paris, November 8, that the “PRC appears in no hurry for early meeting and may ask for more information before agreeing to face-to-face discussions.” (Both ibid., RG 59, Central Files 1970–73, POL CHICOMUS)