Telegram from Ambassador Loy Henderson to Secretary of State Dean Acheson

XXXII NLT (KOREA/SD) 444 89 RECOMING TELEGRAM Department of State TELEGRAPH BRANCH JOP SECRET D-X Action Control: 6329 UNA Rec'd: December 13, 1950 FROM: New Delhi 3:45 p.m. Info SS TO: Secretary of State G NO: 1466, December 13, 1 p.m. DUPLICATE IN W. EUR NEA NIACT. FE USUN 1. I saw Bajpai this morning at his request. He wanted DCR again to discuss Korean problem and talked in greater de- tail than he had on December 12 re conversations which had been taking place in Peking between Panikkar and Communist China. 2. He said that on December 8 GOI had instructed Panikkar approach Communist China inquiring whether they would be willing agree cessation hostilities in Korea under conditions as follows: (A) Cease fire, (B) drawing up demilitarized zone, (c) holding of conversations for settlement Korean problem and subsequently for settlement of Formosa problem in all of which China would have equal participation. With respect to setting up demilitarized zone GOI had ex- pressed its opinion that Communist forces should not move south of 38th parallel and UN forces should be withdrawn from north of 38th parallel. Re question settlement of Korea GOI thought it would be unwise for Communist China insist on with- drawal UN forces from South Korea until government of united and independent Korea been established in compliance with de- cisions UN. Re Formosa GOI had expressed opinion that dis... cussions should be based on decisions at Cairo and Potsdam that Formosa should go to China. Question of when and how Formosa should be turned over to China could be subject of discussions and Communist China should bear in mind that US at present considered Formosa important to maintenance peace and security in Far East particularly Japan. 3. Panikkar had reported in telegram received in New Delhi last evening that on December 11 he had had an hour's con- versation with Chou En-1ai in which latter had insisted that Chinese wished peaceful settlement problems of Korea and of "Far East in general" but that before opening of conversations re future 83 TOP SECRET (over) REPRODUCTION OF THIS By DEB MESSAGE IS PROHIBITED