Memorandum by Mr. J. Franklin Ray, Jr., of the Lend-Lease Administration to Mr. Alger Hiss, Assistant to the Adviser on Political Relations ( Hornbeck )

You may recall the request made by the Chinese Government in February 1943 for five Lend-Lease transport planes to be used for maintaining official communications within China and to supplement the existing CNAC service from Chungking to Calcutta. This request was strongly endorsed by the Ambassador and by the Department in a memorandum submitted to the Munitions Assignments Committee for Air, to which the request was referred.

At the time this request was made, there were being delivered to China two transport planes per month, but all these planes were being assigned to freight operations between Assam, India and the Kunming area, under the terms of a contract between CNAC and the United States Army. It was apparently because of this limitation on the use of the planes then being delivered to China, that the new and separate request for five additional planes was submitted by the Chinese Government.

The MAC (Air) rejected this request, but recommended the extension of a previous assignment of Lend-Lease transport planes for China, which was due to be completed in May 1943, for the balance of the year, at the rate of two planes per month. The Munitions Assignments Board approved this recommendation, and the planes in question have been regularly assigned at the indicated rate to date.

When this last assignment was made, it was not clear whether the planes in question could be applied to fill the need for which the specific Chinese request mentioned above had been submitted. You may recall that, to try to clear up this question, I called on General Burns19 and on an Air Force officer of the Munitions Assignments Board staff. We were informed that the Munitions Assignments Board considered the disposition within a theatre of aircraft assigned to that theatre to be beyond the functions of the Board. This problem was felt to be entirely within the province of the Commanding General of the theatre in consultation with the appropriate Allied Government.

This statement left considerable uncertainty in our minds, but it was felt at the time by China Defense Supplies that the problem was one which could only be worked out within the theatre. I believe there was an informal suggestion that, in view of the Department’s original [Page 675] endorsement of the Chinese request for the desired five planes, the American Embassy at Chungking might be willing to participate in negotiations on the problem between Chinese authorities and the Commanding General’s Headquarters.

In view of the background, you may be interested in the further developments set forth in the attached copy of a memorandum20 prepared by William S. Youngman, Jr., President of China Defense Supplies, Inc., for Col. T. S. Timberman, Chief, Asiatic Theatre, Operations Division, War Department General Staff.

In discussing the problem with me Col. Timberman spoke rather strongly of the War Department’s objections to the expansion of non-military air transport service within China as constituting a severe drain (for fuel and repair parts) on the limited air space available for transport into China. He also questioned the legitimacy of the use to which it was felt these planes would be put. He said there had been criticism from Chinese sources of General Stilwell for keeping at his Headquarters a plane for emergency staff use, while he opposed even the replacement of CNAC losses. I gathered that feelings were running rather high between the Theatre Command and the Chinese authorities concerned in this problem. Dr. T. V. Soong is currently away from Washington and Col. Timberman’s orders were apparently to deal only directly with him, so the matter will not be pressed further until Dr. Soong’s return.

Youngman’s memorandum, attached hereto is rather weak at several points, though the solution he suggests, I feel, is a common sense one. Needless to say, the action taken by China Defense Supplies, purportedly on the authority of the Generalissimo, in assigning the plane No. 42–32787 to replace the lost CNAC plane was considered by Stilwell’s Headquarters and by the War Department as a clear violation of the earlier contract between the U.S. Army and CNAC as to the use of Lend-Lease planes delivered to China. Youngman’s claim that this earlier contractual arrangement, dating from about October 1, 1942, left Chinese authorities in the United States under the impression that the Generalissimo had the right to decide into what war service the Lend-Lease planes being delivered to China should go, is highly questionable, from my personal familiarity with the negotiations leading to the contract in question. I had several discussions on the subject with Mr. Bond of CNAC, and with Lt. Col. McHugh of the Embassy, both of whom felt that the contract being negotiated by General Clayton Bissell was so severe as to promise future trouble.

On the other hand, the plea that this contract, or the later one apparently signed February 17, 1943, was an ultra vires act on the part of CNAC is, in my humble opinion, disingenuous. I strongly believe [Page 676] that the Chinese authorities in Chungking knew what they were doing and are now simply trying to back out of a bad bargain they should never have made.

Incidentally, I have been informally advised by both the War Department and China Defense Supplies that General Arnold recently ordered out to China five other transport planes to be turned over to the Chinese Air Force. I do not have written confirmation of this as yet, but I am assured that the planes have been dispatched from this country. This extra assignment is entirely separate from the CNAC operations under the contract with the U.S. Army and from CNAC’s regular services into and within China. But these five planes obviously constitute another drain on the aviation gasoline and maintenance parts which must be flown in over the hump, and lend some point to the War Department’s objections to the expansion of the CNAC fleet.

I should be glad to discuss this problem with you further when you have had an opportunity to think it over. My own first thought on the matter is that little can be done from this end and that a real meeting of the minds out in Chungking is highly desirable to eliminate this source of friction between the Chinese and our military authorities.

  1. Maj. Gen. J. H. Burns, Executive Officer of Munitions Assignments Board, United States and Great Britain.
  2. Not printed.