The Ambassador has the honor to enclose for the information of the Department
of State a copy of a memorandum of conversation which took place on June 24,
1948 between Mr. Quentin Roosevelt of the China Aviation Corporation and Mr.
Jarvis, the Civil Air Attaché, on the subject of United States air carrier
movement of Shanghai–Hong Kong traffic. The Department will observe that
Minister of Communications Yu Ta-wei informed Messrs. Roosevelt and Bond of
Pan American Airways that he felt that China was “licked” on the
Shanghai–Hong Kong question, and that China would likely not take any
further action in the matter until the present agreement expired.
The Embassy would like to suggest that this memorandum not be discussed with
Pan American Airways in order to insure that source will in future feel that
such matters can be freely discussed with Embassy.
[Enclosure]
Memorandum of Conversation, by the Civil Air Attaché
in China (Jarvis)
Mr. Roosevelt during the course of a conversation on another matter,
volunteered that he and Mr. Bond of Pan American Airways had called on
Minister of Communications Yu Ta-wei, and during the course of their
discussion with him, he mentioned the “Shanghai–Hong Kong consultation
with the Americans.” According to Mr. Roosevelt, Minister Yui stated
that, during the course of the discussions prior to the conclusion of
the Sino-United States air agreement, an understanding had been reached
between the Chinese negotiators and Col. Powell of the U. S. under which
the U. S. agreed to refrain from the movement of Shanghai–Hong Kong
traffic. Minister Yu informed Mr. Roosevelt that in the event he was
responsible for any further treaty negotiations with the Americans, he
intended to have a battery of one hundred lawyers available to check
each word in the document.
Apparently Minister Yu then asked Messrs. Roosevelt and Bond whether
there was a possibility that some arrangement could be made whereby,
through an exchange of letters between carriers, Pan American Airways
would voluntarily refrain from movement of traffic on this segment of
its route. According to Mr. Roosevelt, he and Mr. Bond informed Minister
Yu that the matter did not rest with Pan American, but was one which had
to be discussed solely between the two Governments. Mr. Roosevelt
indicated that he and Mr. Bond then informed Minister Yu that Pan
American Airways was not actively promoting competition for CNAC on this
route and had in fact positively refrained from such activity. Mr.
Jarvis gathered the impression that Messrs. Eoosevelt and Bond left with
Minister Yu the thought that PAA would voluntarily refrain from movement
of this traffic if the U. S. Government would not intervene.
At this point, Mr. Roosevelt queried Mr. Jarvis as to the possible
reaction of the U. S. Government in the event PAA suggested that it, by
an exchange of letters, agree to refrain from the carriage of this
traffic and at the same time pointed out the insignificant amount of
traffic handled by PAA on this segment due to foreign exchange
difficulties. Mr. Jarvis informed him that he was sure that the U. S.
Government would not agree to such a suggestion; that the U. S. position
vis-à-vis the Shanghai-Hong Kong question was firm. Mr. Jarvis went on
to say that not only the rights of PAA were involved in this case, but
also those of such other U. S. carriers as might be certificated to
operate on this route.
[Page 800]
Mr. Roosevelt then mentioned that Minister Yu had informed him that he
did not wish to put any pressure on the CNAC request to operate to
Tokyo, nor did he wish Col. C. Y. Liu, of CNAC, to do so, as in the
event he decided to take further action on the Shanghai–Hong Kong
question, he did not wish the Americans to be in a position to point to
the fact that CNAC had been permitted to go through Tokyo in
justification U. S. operation into Hong Kong. Mr. Jarvis informed Mr.
Roosevelt that no attempt had been made to “tie-up” Tokyo with the
Shanghai–Hong Kong question, as the U. S. believed that the
Shanghai–Hong Kong case would stand on its merits.
At the close of the discussion, Mr. Roosevelt said that Minister Yu
stated that he felt China was “licked” on the Shanghai–Hong Kong
question and that China would likely not take any further action on the
matter until the present agreement expired.
