893.24/1596
Memorandum of Conversation, by Mr. Kermit Roosevelt, Jr., Assistant to the Assistant
Secretary of State (
Acheson
)29
[
Washington
,] May 21, 1943.
| Participants: |
Dr. Liu Chieh, Chinese Minister, and
Counselor of the Chinese Embassy |
|
Mr. A. Hiss—PA/H |
|
Mr. Stanton—FE |
|
Mr. K. Roosevelt—A–A |
Dr. Liu called on me at his request to receive an informal memorandum
clarifying certain aspects of the draft note on Chinese reciprocal aid
agreement, which was handed by Mr. Acheson to Dr. Soong on May 15, 1943. A
copy of this informal memorandum is attached.
Dr. Liu said that the memorandum seemed clear and would be most helpful to
his Government in considering the proposed agreement. Dr. Liu is planning to
telegraph the draft agreement and the informal memorandum to Chungking
immediately.
Dr. Liu observed that it was his understanding that the Chinese currency
turned over to United States authorities would not be earmarked for specific
purposes but could be used for the purchase of materials needed by the armed
forces or for wages or administrative expenses.
In the course of the conversation it was emphasized that the amounts of
Chinese currency to be received by United States authorities, and the
amounts of American dollars to be turned over to Chinese authorities, would
be the subject of joint consideration. Dr. Liu inquired whether this could
mean that no American dollars need be received by China. It was explained to
him that we definitely contemplated that American dollars would be provided
in connection with certain [Page 542]
categories of expenditures. Mr. Hiss also emphasized the fact that the
proposed agreement would not affect the purchases of strategic materials to
be exported from China by the Board of Economic Warfare or by the
Reconstruction Finance Corporation agencies.
[Annex]
The Department of State to
the Chinese Embassy
Informal Memorandum
The general theory underlying the so-called “reverse” Lend-Lease
Agreements is similar to the general theory underlying the master
Lend-Lease Agreements themselves. In both cases the agreements merely
provide general principles under which the war resources of the
contracting governments can be most effectively utilized for the joint
war effort. It is contemplated under both types of agreements that
specific transactions to be effectuated under the agreements will be
carried out on the basis of mutual agreement as to details.
In the draft of a proposed “reverse” Lend-Lease Agreement handed to Dr.
Soong by Mr. Acheson on May 15, 1943, provision is made for several
possible ways by which the government of the Republic of China may,
according to future circumstances as they arise, give assistance to the
armed forces and other official agencies of the United States
Government. Those various types of assistance may be roughly grouped as
follows:
- 1.
- The direct supplying of materials or services for the use of
the armed forces and establishments of the United States.
- 2.
- The supplying of Chinese currency, such currency to be used by
the armed forces and establishments of the United States in
procuring supplies and services and for other payments by them
in the areas under the control of the Government of the Republic
of China. The United States would in turn from time to time
deliver to the Chinese authorities amounts of United States
dollars allotted for such procurement and for such other
payments.
The specific terms and procedures to be followed with respect to
transactions of the above types would, of course, be worked out by
mutual agreement between the appropriate Chinese and American
authorities. It would be contemplated that with respect to the first
type of transaction the Chinese Government would be credited on
Lend-Lease account with the materials or the services supplied to the
United States. In the case of the second type of transaction it would be
contemplated that against the amounts of Chinese currency delivered to
the United States authorities in China, the Chinese Government would
receive dollars computed at the official rate of exchange [Page 543] for such proportion of the total
Chinese currency delivered as shall be agreed upon from time to time and
that the remaining portion or quota of the Chinese currency so delivered
would be credited to the Chinese Government on Lend-Lease account.
It is, of course, to be understood that the whole nature of Lend-Lease
aid is one of voluntary not obligatory assistance. Lend-Lease Agreements
merely specify the general principles which it is agreed will be
followed in those cases in which the Government requested to supply
goods or services under the Agreement considers that it is in a position
to supply such goods or services. Lend-Lease Agreements do not, of
course, in any way prevent the continuance of other procedures of
procurement outside the scope of Lend-lease arrangements.
