CO129-588-24 China- British extra-territorial rights- negotiations with China 23-11-1942 - 1-1-1943 — Page 173

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lessen the psychological benefits which mi ht be expected to accrue from the treaty (and which might more appro- priately be reserved for the later comprehensive treaty). From the beginning we have had no thought of seeking to reserve or to obtain from China anything that is not usual and normal in modern international relations between friendly countries and we have it is believed made this clear both to the Chinese Government and to the British Government. We have proceeded on the assumption that the Chinese Government has had in mind objectives identical with ours and has desired, as strongly as we have desi ed, to see the relations between the U. S. and China placed, through the medium of the brief treaty, on a basis of what is normal, usual, equitable and just in international relations.

The concepts of the British Gov rnment in regard to the question of relinquishment of extraterritorial and related-rights has from the outset of our discussions proved to be substantially the same as ours. As mentioned above, and previously in paragraph_numbered three of our message of November 25 (Mr. Winant's letter of November 27) such divergence of views as has obtained between this Government and the British Government in regard to such questions as the coasting trade and inland navigation arises from differences in the established practices and procedures of the two Governments.

Treatment of commercial subjects by this Government and treatment thereof by the British Government are necessarily affected by considerations and requirements which are not identical..As previously mentioned, we are not in position reciprocally to offer to the Chinese a simple formula suitable for inclusion in the present treaty providing for national treatment in commerce for the reason that in our consideration of such matters we must take into account difficult problems of State and Federal jurisdiction.

In addition, we are not in position reciprocally to offer the Chinese rights of coasting trade or inland navigation. Nevertheless, in an endeavour to meet British wishes, we accepted a formula designed among other things to place coasting trade and inland navigation in the category of pending matters. Accordingly we propose to the Chinese that these matters be held in abeyance. e proposed as an alternative a formula suggested by the British Government. As a third suggested pro- cedure we proposed the insertion of a full article on inland navigation and coasting trade along the lin s of articles written into our modern treaties with other countries. The question of proposing such en article was raised with the British Government as early as October 31 and received comment in Mr. ¡den's letter to you of November 12 to the effect that if the inclusion of an additional article in the treaty became unavoidable the British Government would be agreeable to accepting one along those general lines. As the Chinese have been insistent in dealing with the coast- ing trade and inland navigation in the present treaty, we did not see how we could do other than keep such action as might be decide upon within the framework of our policy not to seek special rights. Our in- ability to offer reciprocal rights necessitated the action which we took and which had received full con- sideration. In this connection we mentioned in paragraph numbered 6 of our message of November 25 that we be- lieved that we had come as closely as is possible within

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