893.50 Recovery/6–2748: Telegram
The Ambassador in China (Stuart) to the Secretary of State
[Received June 27—1:55 a.m.]
1164. Exact text article IV (old numbering) as presented to Foreign Office June 25 follows:
“Article IV. 1. The Government of China undertakes to adopt or maintain such measures of control as may be necessary to prevent the diversion of assistance obtained under the provisions of this agreement from the uses for which it was furnished or to uses inconsistent with the purposes of this agreement. These measures shall include effective measures for the prevention of pilferage and of the diversion of commodities furnished under this agreement to illegal or improper markets or channels of trade.
2. All commodities provided by the Government of the United States of America pursuant to this agreement shall be processed and distributed by commercial enterprises or by private or Chinese Government agencies, and in accordance with terms and conditions, agreed upon from time to time between the Government of the United States of America and the Government of China. Representatives of the Government of the United States of America may exercise direct supervision and control over processing and distribution of such commodities.
3. The Government of China, in consultation with representatives of the United States of America, will take all appropriate steps designed to achieve fair and equitable distribution within the areas under its control of commodities provided by the Government of the United States of America pursuant to this agreement and of similar commodities imported into China with other funds or produced locally. To the extent that circumstances and supply availabilities permit, a distribution and price control system shall be inaugurated or maintained in urban centers of China with the intent of insuring that all classes of the population shall receive a fair share of imported or indigenously produced essential civilian supplies. In permitting United States of America expendable commodities made available under the agreement to be utilized in support of the Chinese efforts to improve consumption and price controls, it is understood that the Government of the United States of America takes no responsibility for the success of these urban programs.
4. The prices at which supplies furnished by the United States of America pursuant to this agreement will be sold in China shall be agreed upon between the Government of China and the Government of the United States of America.”
Sent Department 1164, repeated Shanghai 535.