893.24/1627: Telegram
The Chargé in China (Atcheson) to the Secretary of State
Chungking, July 27,
1943—11 p.m.
[Received 3:18 p.m.]
[Received 3:18 p.m.]
1307. Embassy’s 1108, July 6, 7 p.m.
- 1.
- Arthur Young43 has come to see me on his own initiative to discuss the question of reverse Lend-Lease. He stated that in his capacity of adviser to the Ministry of Finance he has been urging upon Dr. Kung and other concerned officials favorable consideration of the matter and that in general the attitude of these officials has been favorable. He said that the chief apparent obstacle at present was a fear in some Chinese quarters that if and when China should become a major base of operations against Japan and we should have in China large numbers of American troops China would be giving us under reverse Lend-Lease much more than China had received or would be receiving. Dr. Young indicated also that he was interested in learning whether it was the American concept that reverse Lend-Lease would involve the furnishing by China of strategic materials. Having in mind the draft enclosed with the Department’s instruction 250, March 17, the second substantive paragraph of Department’s 649 [659], May 24,44 and third paragraph of message to Fowler from OEW45 in Department’s 752, June 14,46 I said that I did not think that the furnishing of strategic materials by China was contemplated under reverse Lend-Lease; that in general reverse Lend-Lease was entirely voluntary and my understanding was that the obligations of the other party in such arrangements with us were to be considered as naturally limited by the other countries’ capacities and potentialities; thus it seemed to me, speaking personally, that under the terms of the proposed agreement and within the framework of the general concept China could by entering into such an agreement enjoy the obvious political benefits thereof and still retain final discretion as to amount of reverse Lend-Lease to be furnished.
- 2.
- Mr. Fowler of OEW has since receipt of Department’s 752 several times asked what progress was being made towards effecting a reverse Lend-Lease agreement with China. I have the impression that the [Page 562] message in question influenced Fowler to feel that if and when any subsidiary or other conversations with Chinese officials should take place here in regard to the matter, he would be involved as one of the American negotiators. On July 25, Mr. Lucker of OEW, who has just arrived, stated that before he left Washington, he was told by Department to consult me as to what progress had been made with Chinese in the matter. He said the Secretary of State and the Chinese Ambassador had had a number of discussions of it and also that he had seen a memorandum indicating that the question of the furnishing of strategic materials was entirely without the purview of the proposed agreement. (Mr. Fowler on the other hand has put forth his firm opinion that the furnishing of strategic materials is necessarily and must be part of China’s obligations under a reverse Lend-Lease agreement.)
- 3.
- As will be obvious from the above the Embassy is in a somewhat awkward position. We have not received from Department information in regard to what if any developments have taken place in Washington subsequent to those described in Department’s 649 [659]. I have no desire to interject the Embassy prematurely into a matter that is assumably under negotiation in Washington but unavoidable circumstances are, as indicated, getting us involved in it to some extent. Arthur Young states that he is coming to see me again in the matter in a few days and I should like, unless Department perceives objection, to be in a position to tell him definitely whether or not the question of the purchase of strategic materials (as well as the question of transportation costs for strategic materials mentioned by OEW in Department’s 752) is involved. I may add that I think a fair possibility of facilitating the matter rests to an appreciable extent upon Young, as the Finance Minister has asked him to study the matter and Young himself is favorably disposed toward the proposal, and especially as Dr. Soong is now absent from Washington.
- 4.
- As for Mr. Fowler’s connection with the matter, I may say confidentially and frankly that while I consider that he is, as an experienced businessman, capable and effective in his procurement and related activities I would envisage almost certain crossing of the wires if he should continue to receive instructions which lead him to believe that it will devolve upon him to “negotiate” with Chinese officials in regard to the conclusion of a reverse Lend-Lease agreement. If such agreement is concluded and if it should involve furnishing by Chinese of strategic materials or the payment of transportation costs therefor, participation by Mr. Fowler in the later working out of pertinent technical details would, of course, seem to be appropriate and essential.
Atcheson