Foreign Relations of the United States: Diplomatic Papers, 1942, China

793.003/12–842

The Chinese Embassy to the Department of State ⁷

Memorandum

After having given careful consideration to the memorandum of the United States Government proposing certain modifications to the draft treaty, and the accompanying exchange of notes, the Chinese Government, in view of the particularly cordial relations existing between the two countries, has decided to accept all the proposed modifications of the United States Government, with the sole exception of that paragraph which concerns coasting trade and inland navigation in the waters of the Republic of China. The Chinese people attach the highest importance to the question of coasting trade and inland navigation, and in consequence the Chinese Government is specially anxious that it be dealt with in as clear-cut a manner as the question of visits by foreign warships in Chinese territorial waters. Accordingly, the Chinese Government desires to state as follows.

A. With reference to American modifications of draft treaty:—

1. Since the United States Government finds difficulty in accepting the Chinese proposal of Article I on equality and reciprocity and has embodied its principle in the revised text of the Preamble, the Chinese Government agrees to withdraw the proposed Article entirely.

2. Likewise, in regard to the end of the second paragraph of Articles II and III of the American draft—”and for the recognition and protection of American legitimate rights therein”, the Chinese Government is ready to meet the wish of the United States Government and agrees to withdraw its proposed additional language reading as follows:

“always provided that such rights are consonant with the laws and regulations of the Republic of China”.

3. With regard to the first item of paragraph three of the Chinese suggestions concerning “fraud” in the American draft, the Chinese Government accepts the American revision reading as follows:

“of fraud or of fraudulent or other dishonest practice in the acquisition of such rights or titles, it being understood that no rights or title shall be rendered invalid by virtue of any subsequent change in the official procedure through which it was acquired.”

4. With regard to the first part of the Chinese proposed addition to Article IV of the American draft, which reads “It is also agreed that these rights or titles shall be subject to the laws and regulations of the Republic of China concerning taxation, national defense and the right of eminent domain”, the Chinese Government appreciates the American concurrence therein.

5. With regard to the second part of the Chinese proposed addition to the same Article concerning alienation of rights and title to the government or nationals of a third country, the Chinese Government, after due consideration, is still desirous of maintaining the Chinese proposal but is willing to make a declaration in the accompanying exchange of notes in the terms of the United States Government.

6. The Chinese Government appreciates the concurrence of the United States Government in the deletion from Article V of the American draft the words “and to the carrying on of commerce” and also its concurrence with the Chinese view concerning the opening of consular offices.

B. With reference to the American revision of the proposed exchange of notes:

1. The first paragraph of the American version up to and including the words “employment of foreign pilots in the ports of the territory of China are also relinquished” is accepted without any change.

As regards ports to be opened to American overseas merchant shipping, the Chinese Government, in lieu of naming the various ports specifically, proposes the following clause:

“In the light of the abolition of treaty ports as such, it is understood that all coastal ports in the territory of the Republic of China which are normally open to American overseas merchant shipping will remain open to such shipping after the coming into effect of the present treaty and the accompanying exchange of notes.”

2. As regards the second paragraph concerning treatment of overseas merchant shipping, and the third paragraph concerning visits by warships, the Chinese Government concurs with the American draft.

3. As for coasting trade and inland navigation, the Chinese Government desires to reiterate the importance it placed on this question and proposes, in replacement of the fourth paragraph in the American draft, the following clause, namely:

“It is mutually understood that the Government of the United States of America relinquishes the special rights which vessels of the United States of America have been accorded in connection with the coasting trade and inland navigation in waters of the Republic of China and that the Government of the Republic of China is prepared to take over any American properties that may have been engaged for those purposes and to pay adequate compensation therefor. It is further understood, however, that should the Republic of China later in any way extend the right of inland navigation or participation in coastal trade to vessels of any third nation, such rights would similarly be extended to vessels of the United States of America.”

4. All the remaining American version of the exchange of notes, i. e. beginning with the words “It is mutually understood that questions which are not covered by the present treaty and exchange of notes” down to the end of the draft, is acceptable in their entirety.

Washington , December 7, 1942.

7. Handed to the Assistant Chief of the Division of Far Eastern Affairs by the Minister Counselor of the Chinese Embassy on December 8, 1942.