893.50 Recovery/6–2948: Telegram
The Ambassador in China (Stuart) to the Secretary of State
[Received June 29—8:56 a.m.]
1178. Deptel 938, June 28 appreciated and most helpful. Embassy delivered this morning aide-mémoire to Foreign Office stating US must insist upon retention articles 3 and 4 as presented by Embassy. Foreign Office visibly shaken.
At later second conference
1. Foreign Office withdrew all objections to article II, paragraph 1(a)(2), new draft which paragraph had been source considerable discussion.
2. Foreign Office reiterated its desire to see article 2, paragraph 2, rephrased as reported Embtel 1172.53 Embassy supports.
3. Foreign Office capitulated on article 3 to extent willing as “final concession” to accept paragraphs 1, 2 and 3 up through word “article”, deleting word “including” and those illustrative topics of conversation labeled subparagraphs a, b and c in new text.
With respect to paragraph (3) (a), Foreign Office reiterated its willingness at any time to consult and attempt to remedy instances where due to inefficiencies or other factors, American commercial interests were suffering under operation of laws, regulations and rules. This is true and in recent weeks Foreign Office has been not only cooperative but effective in such specific matters as obtaining charter for Bank of America and release certain materials Andersen, Meyer [& Co.].
With respect to 3 (b), Embassy has received oral assurance Premier’s August 13 statement remains national policy and can seek with probable sucess commitment in writing this effect prior signature bilateral.
With respect to 3 (c), Foreign Office confirmed today to Embassy that Foreign Minister’s November 28 statement54 this subject remains policy Chinese Government. In view difficulty Chinese Government accepting article 3, paragraph 2 (which goes well beyond article XVII [Page 589] FCN (Friendship, Commerce, and Navigation) and fact that subparagraphs 3a, b and c are illustrative of topics of consultation and not undertakings per se, Embassy recommends acceptance.
4. Foreign Office accepted new article IV in toto with exception deletion second sentence paragraph 1 (“direct supervision and control”). Negotiations have made clear and Chinese therein have accepted firm US intention to continue under aid program same type supervision and control employed so successfully by CRM (Chinese Relief Mission). Accordingly, Embassy proposes agree with Chinese article 4 (with single deletion given above), believing, as do Chinese negotiators, that words “in accordance with terms and conditions agreed upon, et cetera” appearing in immediately preceding sentence of paragraph 1 sufficiently covers authority to impose direct supervision and control. Embassy, however, will discuss this point as well as article 3 status with Lapham prior communication any intimation acceptance to Foreign Office.
If foregoing acceptable to Department (including rewording article 2, paragraph 2, Embtel 1172), Embassy believes agreement can be considered reached with time left for mechanics for signature July 2 or 3. Please reply Niact.
Sent Department 1178, repeated Shanghai 546.
- June 28, 5 p.m., p. 587.↩
- Embodied, presumably, in the note of November 27, 1947; for summary, see telegram No. 2325, December 2, 1947, 3 p.m., from the Ambassador in China, Foreign Relations, 1947, vol. vii, p. 1382.↩