In conformity with these new circumstances, the Presidium of the Supreme Soviet of the Union of Soviet Socialist Republics and the Central People's Government of the People's Republic of China have decided to conclude the present agreement on the Chinese Changchun Railway, Port Arthur, and Dalny.

ARTICLE I

Both High Contracting Parties have agreed that the Soviet Government transfers gratis to the Government of the People's Republic of China all its rights in the joint administration of the Chinese Changchun Railway, with all the property belonging to the Railway. The transfer will be effected immediately upon the conclusion of a peace treaty with Japan, but not later than the end of 1952. Pending the transfer, the now existing position of the Soviet-Chinese joint administration of the Chinese Changchun Railway remains unchanged; however, the order of filling posts by representatives of the Soviet and Chinese sides, upon the coming into force of the present Agreement, will be changed, and there will be established an alternating filling of posts for a definite period of time (Director of the Railway, Chairman of the Central Board, and others). As regards concrete methods of effecting the transfer, they will be agreed upon and determined by the Governments of both High Contracting Parties.

ARTICLE II

Both High Contracting Parties have agreed that Soviet troops will be withdrawn from the jointly utilized naval base of Port Arthur and that the installations in this area will be handed over to the Government of the People's Republic of China immediately upon the conclusion of a peace treaty with Japan, but not later than the end of 1952, with the Government of the People's Republic of China compensating the Soviet Union for expenses incurred in the restoration and construction of installations effected by the Soviet Union since 1945.

For the period pending the withdrawal of Soviet troops and the transfer of the above installations, the Governments of the Soviet Union and China will appoint an equal number of military representatives for organizing a joint Chinese-Soviet Military Commission which will be alternately presided over by both sides and which will be in charge of military affairs in the area of Port Arthur; concrete measures in this sphere will be determined by the joint Chinese-Soviet Military Commission within three months upon the coming into force of the present Agreement and shall be implemented upon the approval of these measures by the Governments of both countries.

The civil administration in the afore-mentioned area shall be in the direct charge of the Government of the People's Republic of China. Pending the withdrawal of Soviet troops, the zone of billetting of Soviet troops in the area of Port Arthur will remain unaltered in conformity with the now existing frontiers. In the event of either of the High Contracting Parties being subjected to aggression on the part of Japan or any state which should unite with Japan and as a result of this being involved in military operations, China and the Soviet Union, may, on the proposal of the Government of the People's Republic of China and with the agreement of the Soviet Government, jointly use the naval base of Port Arthur in the interests of conducting joint military operations against the aggressor.

ARTICLE III

Both High Contracting Parties have agreed that the question of Port Dalny must be further considered upon the conclusion of a peace treaty with Japan. As regards the administration in Dalny, it fully belongs to the Government of the People's Republic of China.

All property now existing in Dalny provisionally in charge of or under lease to the Soviet side, is to be taken over by the Government of the People's Republic of China. For carrying out work involved in the receipt of the aforementioned property, the Governments of the Soviet Union and China appoint three representatives from each side for organizing a joint commission which in the course of three months after the coming into force of the present agreement shall determine the concrete methods of transfer of property, and after approval of the proposals of the Joint Commission by the Governments of both countries will complete their implementation in the course of 1950.

ARTICLE IV

The present agreement comes into force on the day of its ratification. exchange of instruments of ratification will take place in Peking.

The

Done in Moscow on February 14, 1950, in two copies, each in the Russian and Chinese languages, both texts having equal force.

Signed:

BY AUTHORIZATION OF THE PRESIDIUM OF THE SUPREME SOVIET OF THE UNION OF SOVIET SOCIALIST REPUBLICS

A. Y. VYSHINSKY

BY AUTHORIZATION OF THE CENTRAL PEOPLE'S GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA

CHOU EN-LAI

Agreement between the Government of the Union of Soviet Socialist Republics and the Central People's Government of the People's Republic of China on Granting Credits to the People's Republic of China

In connection with the consent of the Government of the Union of Soviet Socialist Republics to grant the request of the Central People's Government of the People's Republic of China on giving China credits for paying for equipment and other materials which the Soviet Union has agreed to deliver to China, both Governments have agreed upon the following:

ARTICLE I

The Government of the Union of Soviet Socialist Republics grants the Central People's Government of the People's Republic of China credits, calculated in dollars, amounting to 300,000,000 American dollars, taking 35 American dollars to one ounce of fine gold.

In view of the extreme devastation of China as a result of prolonged hostilities on its territory, the Soviet Government has agreed to grant credits on favorable terms of one percent annual interest.

ARTICLE II

The credits mentioned in Article I will be granted in the course of five years, as from January 1, 1950, in equal portions of one-fifth of the credits in the course of each year, for payments for deliveries from the U. S. S. R. of equipment and materials, including equipment for electric power stations, metallurgical and engineering plants, equipment for mines for the production of coal and ores, railway and other transport equipment, rails and other material for the restoration and development of the national economy of China.

The assortment, quantities, prices, and dates of deliveries of equipment and materials will be determined under a special agreement of the parties; prices will be determined on the basis of prices obtaining on the world markets.

Any credits which remain unused in the course of one annual period may be used in subsequent annual periods.

ARTICLE III

The Central People's Government of the People's Republic of China repays the credits mentioned in Article I, as well as interest on them, with deliveries of raw materials, tea, gold, American dollars. Prices for raw materials and tea, quantities and dates of deliveries will be determined on the basis of prices obtaining on the world markets.

Repayment of credits is effected in the course of 10 years in equal annual parts one-tenth yearly of the sum total of received credits not later than December 31 of every year. The first payment is effected not later than December 31, 1954, and the last on December 31, 1963.

Payment of interest on credits, calculated from the day of drawing the respective fraction of the credits, is effected every six months.

ARTICLE IV

For clearance with regard to the credits envisaged by the present agreement the State Bank of the U. S. S. R. and National Bank of the People's Republic of China shall open special accounts and jointly establish the order of clearance and accounting under the present agreement.

ARTICLE V

The present agreement comes into force on the day of its signing and its subject to ratification. The exchange of instruments of ratification will take place in Peking.

Done in Moscow on February 14, 1950, in two copies, each in the Russian and Chinese languages, both texts have equal force.

Signed: BY AUTHORIZATION OF THE GOVERNMENT OF THE UNION OF SOVIET

SOCIALIST REPUBLICS

A. Y. VYSHINSKY

BY AUTHORIZATION OF THE CENTRAL PEOPLE'S GOVERNMENT OF THE
PEOPLE'S REPUBLIC OF CHINA

CHOU EN-LAI

APPENDIX C

(Referred to on p. 447)

EXCERPT FROM THE SPEECH OF HON. JOSEPH W. MARTIN, JR., FEBRUARY 12, 1951, AS PRINTED IN THE CONGRESSIONAL RECORD APPENDIX (FEBRUARY 15, 1951) Now, let us examine what we are doing today from a practical standpoint. We appear to have solidified our position along the Han River in the vicinity of the thirty-eighth parallel in Korea. That theater occupies approximately 200,000 of our troops, with Japan as a base of operations.

On Formosa to the south, the recognized Government of the Republic of China, headed by Generalissimo Chiang Kai-shek, still holds out, together with its antiCommunist army of 800,000 troops. Despite the fact that the only Government of China that we officially recognize is the generalissimo's government, the administration in Washington refuses to back the generalissimo and his fighting forces. In fact, President Truman in his official announcement on Korea on June 27, 1950, declared that we were sending the Seventh Fleet to Formosa to prevent any more air and sea operations by the generalissimo's forces against the Chinese Reds, thus inactivating the 800,000 troops on the island.

On the Chinese mainland, anti-Communist guerrilla bands continue to make raids on the Chinese Reds. Approximately 1,500,000 anti-Communist Chinese guerrillas are engaged in these sorties.

In French Indochina, a so-called volunteer Communist army, composed substantially of Chinese Reds, engages a French force. The French have approximately 150,000 fighting men operating in that area.

In the balance of Asia, the operations of the Chinese Reds are a constant threat to the security of Burma, Malaya, Indonesia, Pakistan, and India.

In Europe the forces of the Soviet Union and its puppet states are comparatively quiescent. However, military men are generally in agreement that the Soviet Union, with its 200 Red army divisions, could roll all the way to the English Channel on the west and to the Pyrenees on the south unless a miraculous rearmament program were undertaken by the free nations of Europe. At the present time, the free nations of the world combined could not muster more than 60 divisions to stop a Soviet advance in continental Europe.

Two nations in Europe are on the outside looking in. Yugoslavia, a former satellite, has broken with the Soviet Union, and Tito casts an occasional friendly glance at the western powers. Spain, the guardian of the Pyrenees and one of the strongest military powers in Europe today, remains isolated from the free nations, anti-Communist though the Franco regime is.

That briefly is the practical situation. Just where do we go from here? Apparently it is the aim of the administration in Washington, as it has been for the past 5 years, to put our eggs in the European basket. We are told that American troops should be put on the continent of Europe. We are at this moment sending more and more military supplies to the members of the North Atlantic community. We are sending food to Tito. We are in consultation with the governments of Western Europe and their military leaders.

Everyone knows that we must have an effective aid program for Europe. Everyone knows that we must not, if we can possibly prevent it, allow the resources and productive capacity of the free European nations to fall into Communist control. It is essential to have a program that meets this problem.

But I protest with every resource at my command the formulation of any over-all strategy which virtually ignores the focal point of our trouble todayAsia. And I might add that Republicans in countless numbers, myself included, have been protesting such a policy, such a strategy, for years. Our protests date all the way back to 1943 when the first secret decisions were reached by the administration in Washington to give its blessings to the Chinese Communists as a political force in the Orient, as opposed to our great ally, the established government of the Republic of China.

How many Americans recall that on December 15, 1945, President Truman publicly announced to the world that unless the Republic of China admitted Chinese Reds to its government, American aid would be cut off? How many Americans recall that the aid was cut off and that General Marshall was sent to China to make sure that the troops of Generalissimo Chiang Kai-shek stopped their attacks on the Chinese Reds? How many Americans recall the protests against this policy made by such outstanding experts as General Wedemeyer, Patrick J. Hurley, and William C. Bullitt? How many people recall that General MacArthur declared that our failure to help the Republic of China may be "the single greatest blunder in the history of the United States"?

Stop and think.

We abandoned the anti-Communist forces of Asia once, and the Reds took over China. Are twe going to make that same mistake twice?

America has suffered 50,000 casualties in Korea. Mr. Truman says we are going to stay in Korea,

Are we going to leave 200,000 American boys stranded in Korea? Or does some master planner think the pressure can be taken off them by deploying other hundreds of thousands of American boys to the scene in Europe?

If we really want to take the pressure off our forces in Korea, and if we want to diminish the threat of a Soviet sweep across Europe, why, may I ask, do we not employ the 800,000 anti-Communist Chinese troops on Formosa? There is no question whatsoever about the desire and the eagerness of the Generalissimo and his troops to join in battle against the Chinese Reds. When the Korean conflict broke out, the Generalissimo, within a week, offered to transport immediately 33,000 troops from Formosa to Korea. We turned him down cold.

Why?

Our State Department claimed that we did not want to antagonize the Chinese Reds and bring them into the conflict.

Well, the Generalissimo's troops are still on Formosa, but our boys have been fighting the Chinese Reds since last November.

The State Department's reasoning is no longer valid today, if it was ever valid. What could be sounder logic, both strategically and militarily, than to allow the anti-Communist forces of the Generalissimo on Formosa to participate in the war against the Chinese Reds? Why not let them open a second front in Asia?

Let us consider the possibilities:

First. There is good reason to believe that the Chinese Reds could not support a two-front war. They have neither the railroads nor the highways nor the transportation to supply a force fighting in Korea and another on the Chinese mainland, where presumably the troops of the Generalissimo would infiltrate if we gave them the necessary material aid.

Second. There is excellent reason to believe that if the Generalissimo's 800,000 fighting men reached the mainland of China tomorrow, they would double the size of their army within six to eight weeks by the addition of anti-Communist guerrilla forces already fighting the Reds in South China.

Third. The opening up of a second front on the Chinese mainland by the forces of the established government of China, operating from Formosa, would not only take the pressure off our forces in Korea, but would reduce the pressure on the French in Indochina and the Communist threat to Burma, Malaya, Indonesia, Pakistan, India, and Europe.

Fourth. According to responsible military opinion-yes, right in our own Pentagon-the establishment of a second front on China's mainland by the armies of Generalissimo Chiang Kai-shek is not only feasible and practical with aid from us, but it would be the cheapest operation that we could promote in the terms of dollars and manpower.

The forces of the Generalissimo are mostly battle tested, and they are as well trained as the Chinese Reds. Their needs to make a second-front operation successful fall mainly in the categories of ammunition, transportation, planes,

tanks, and food. The Generalissimo has planes and tanks, but he would need more. The Generalissimo has a navy, but it needs replacement parts and servicing.

Whether the second front would be opened up by an invasion of the mainland or whether it would be built up by a series of commando raids and night landings would depend on the number and strength of the Chinese Red forces in that area. For such purposes the Generalissimo already has assembled miscellaneous craft, but his operations would be much more successful if the United States provided amphibious craft, landing barges, and PT boats.

In addition, it would be desirable to have American experts to help train the Generalissimo's officers and men. Shipments of food-a critical item in Asiawould be a prime necessity.

What kind of logic is it that lets our soldiers die in Korea when, by shipping the proper supplies to the Generalissimo, a second front could be opened in China without a single GI being forced to place a foot on the soil of the Chinese mainland?

Certainly, if the Soviet Union can employ its puppet states to fight its wars even against their will, then the United States can call on its friends who are not only willing but begging for the opportunity.

Certainly we want a united and militarily strong Europe. Certainly we are willing to provide equipment and possibly some of the manpower necessary to achieve that goal.

But let us not place all our eggs in the European basket. Let us remember that we have friends in Asia and that we are fighting a war in Asia at this very moment.

If it is right for American boys to fight Chinese Reds in Korea, what can be wrong with American help to the anti-Communist Chinese fighting the Reds on their own soil?

What are we in Korea for, to win or to lose?

If we are in Korea to win, then we should do everything possible to bring that victory about. If we are not in Korea to win, then this administration should be indicted for the murder of thousands of American boys.

Some persons may ask: If a second front in Asia can be opened at very small cost to ourselves and without employing American troops, why haven't our generals done it?

The answer is that we do have military people who favor the employment of the anti-Communist forces of the Republic of China. There is good reason to believe that General MacArthur favors such an operation. There is good reason to believe that there are people in the Pentagon who favor such an operation. Why hasn't a second front been opened? The reason is that the State Department is preventing it, the same State Department crowd that cut off aid to the Government of China back in 1946, thus allowing China to fall into Communist hands. Can anyone expect the State Department to admit 5 years too late that it was wrong? Can anyone expect the State Department to accept the blame for the fact that American boys are now being killed by Chinese Reds?

No; the State Department, as now constituted, is never going to permit a single soldier from Formosa to participate. Why? Because it would mean that the State Department would finally have to admit that we should have supported Generalissimo Chiang Kai-shek all along.

If we want to develop a true global strategy that will wipe out the Communist threat of world domination, if we want a strategy that will save Europe and save Asia at the same time, if we want a strategy that will help save American lives not only in Korea, but wherever the next so-called police action may occur, then I say to you that we must clean out the State Department from top to bottom, starting with Dean Acheson.

The master planners in the Kremlin have had their eye on Asia for a quarter of a century. All anyone has to do is to read the writings of Lenin, Stalin, or the Daily Worker. William Z. Foster, the head of the Communist Party in the United States, wrote in the Daily Worker on December 2, 1945, "the war in China is the key to all problems on the international front."

Hitler in Mein Kampf stated emphatically that Asia was the key to the world situation. Tojo knew that Asia was the key to the world situation. Military strategists of many governments have declared the same thing time and time again.

Almost everybody knows it except our State Department.

Time is running out in Asia. How long do you think 1,500,000 anti-Communist guerrillas can hold out against superior forces? How long will it be before