7 -

End

necessary, hand over the 'planes to the representatives of

CAT. INC. The solicitors retained by the Chinese Nationalist

side, who accompanied General Donovan, were unable to

explain how the Hongkong Government could take the action

which General Donovan suggested consistently with the law.

G neral Donovan threatened the the adverse effect which any

failure of the American interest to get these 'planes would

have on Marshall Aid and said the Attorney General must be

practical.

January 5th. Donovan wrote a letter to the Attorney

General suggesting that the Hongkong court be moved to

take cognizance of new facts, i.e. the Chinese Nationalist

certificate of transfer. He said that the Attorney General

should himself appear either directly or as micus curae

to make a submission in this sense. He added that the

CAT. INC. were ready to explore with the Hongkong Government

any suitable method of enabling CAT. INC. to get the

'planes by executive action. He made the point that this

executive action might hardly be possible if British

recognition of the Chinese Communists (this hourly anticipated)

wes not deliberately expressed to be non-retroactive.

Attorney General in reply sim ly acknowledged this

communication but said he was not willing to continue

the discussion.

The

6th January. Case No. 5 instituted, CAT. INC. v.

Chennault and Willauer, claiming possession of the assets of

CNAC. Case No. 6 also instituted, CAT. INC. v.

Chennault and Willauer claiming possession of the assets of

CATC.

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