033.1193 Nelson, Donald M./11–644

Memorandum of Conversation, by Mr. Granville O. Woodard of the Division of Chinese Affairs 39

Participants: Mr. Donald M. Nelson
Mr. Edward Locke
Mr. John Carter Vincent
Mr. E. F. Stanton
Mr. G. O. Woodard

Mr. Donald M. Nelson called at the Department on the above date in connection with his return visit to China40 and during the course of about an hour’s interchange brought out the following:

His return to China is for the primary purpose of setting up a War Production Board. He emphasized that the long-range postwar considerations would be subordinate to the primary purpose of increasing production needed to carry on the war. The WPB would be responsible for directing, supervising and coordinating the various public and private production agencies, but would not directly take part in the management. Nelson admitted that this might be somewhat difficult of accomplishment, referring in this connection to Howard Coonley’s assignment as “Vice Director”. He felt that it was more or less inevitable that he would either directly or indirectly come to play some part in actual management.

Nelson said that an organization chart with an outline of functions had been left with the Generalissimo and that he had approved it unqualifiedly. Nelson said that he had insisted that the WPB be placed directly under the Generalissimo’s control. The Generalissimo had agreed to this, although he had also insisted that only by Nelson’s return to China could success of the WPB be assured. To this Nelson in turn emphasized the necessity of selecting the best men for the [Page 283] various jobs regardless of party affiliations or political standing. With this also Nelson indicated the Generalissimo was in agreement.

Nelson indicated that the President has asked him to return from China via Australia and New Zealand in order to outline to appropriate officials the object of his return trip to China and to explore possible fields or areas in which a cooperative approach might be developed. He made a point of emphasizing that the President had not asked him to make any approaches in this connection vis-à-vis the British.

During the course of the conversation, mention was made of the work of the Chinese Cooperatives (Indusco) and Nelson indicated that the potentialities of this organization would not be overlooked in the effort to step-up China’s wartime production.

The attached copy of the Embassy’s no. 3053 of October 17 [12], 1944.41 transmitting copies of memorandums of conversations between the Generalissimo and Mr. Nelson during the course of his previous visit to China amplifies the foregoing and will serve to throw further light on the general objectives Mr. Nelson has in mind in connection with the setting up of a Chinese War Production Board.

  1. The substance of this memorandum was transmitted to the Ambassador in China for his background information by the Secretary of State in telegram No. 1485, November 14, 8 p.m., not printed.
  2. Mr. Nelson with his party left for Chungking on November 9.
  3. Ante, p. 266.