893.51/7732

Memorandum of Conversation, by Mr. Alger Hiss, Special Assistant to the Director of the Office of Far Eastern Affairs (Hornbeck)

Participants: Under Secretary Bell, Mr. White, and Mr. Irving Friedman of the Treasury Department; Major General Lucius Clay of the War Department; Messrs. Ballantine, Hiss and Collado.

Reference is made to memorandum of conversation of January 19.

At Mr. Bell’s invitation a further meeting was held today to discuss the proposed message from the President to the Generalissimo in the light of a memorandum dated January 19 which Treasury had subsequently received from the President (copy attached hereto50).

[Prior to the meeting there had been approved by the Secretary a redraft of a message to the Generalissimo prepared in the Department. Copies of this draft had been discussed with General Clay by Mr. Hiss and had been sent to Mr. Bell (copy of this draft is also attached hereto). General Clay had indicated disagreement with the Department’s draft and had said that he would have to discuss it with the Chief of Staff and with the Secretary of War.]51

Dr. White proposed that the substance of the first and last paragraphs of the Department’s draft be retained and that in lieu of the intervening portion of the Department’s draft there be substituted a reference to Madame Chiang’s letter to the President referred to in the President’s memorandum of January 19. In the course of discussion it developed that the Treasury representatives and General Clay remained opposed to any statement that might imply a possible readiness to consider the granting of a loan. It developed also that [Page 856]both the Treasury representatives and General Clay remained strongly opposed to the idea of sending a Commission to China, despite the fact that such a suggestion was contained in the President’s message to the Generalissimo of January 5. A good deal of the same ground that had been covered in the preceding day was again repeated with little, if any, apparent change in attitudes. General Clay remarked that the Secretary of War feels very strongly about the situation in China and that he, General Clay, could agree on the basis of his present instructions only to a message of the kind proposed by the War Department and Treasury the day before or the message along the lines suggested by Dr. White. The Department’s representatives said that in their opinion Dr. White’s suggestion would not involve the seriously adverse risks which they anticipated would result from the prior draft favored by the War Department and the Treasury Department. The Department’s representatives added that, in their opinion, Dr. White’s current proposal would merely postpone the issue of whether or not we were prepared to consider the possibility of a loan. They felt that this issue would be raised either in a reply to the proposed message or upon Dr. Kung’s arrival in this country. They said that, however, in view of the views of the War Department and the Treasury Department they were prepared to recommend to the Secretary of State that he express no objection to the sending of a message along the lines indicated by Dr. White.

Thereupon a draft of a message of the kind suggested by Dr. White was worked out and agreed to (copy attached hereto52).

[The Secretary subsequently authorized Mr. Dean Acheson to indicate to the Treasury that he did not object to the message going forward, it received the President’s approval the same evening and was despatched to Chungking as the Department’s No. 108, January 20, 1944].53

[Annex]

Suggested Message From President Roosevelt to Generalissimo Chiang Kai-shek 54

I have carefully studied your recent message transmitted through Ambassador Gauss, and I fully recognize the extent to which China’s resolute war stand has rendered her economic situation acute. I am fully mindful of the importance of taking every practical cooperative step to make possible the most active prosecution of the war, as well as to make possible an orderly development of China’s industry and [Page 857]trade after the war. I think it important that you should understand in this connection our special problems over here.

I cannot escape the feeling that because of the distance between us and between our respective advisers there may be danger that we may fail adequately to work out our common problems and may rush into decisions which would not be in the interests of either of our peoples. Accordingly, I should like to renew to you the suggestion which I made in my message of January 5 to send to Chungking a small commission composed of individuals of the highest prestige in whom I have complete confidence to discuss with you and your advisers your proposals and the problems to which they give rise on our side. If you are agreeable with this suggestion, the commission can be despatched at the earliest possible moment so that it may complete its work quickly and without causing delay in resolving your problems.

Meanwhile, I should like to make this specific suggestion: Just before receiving your message I had approved instructions to General Stilwell and to Ambassador Gauss to take up urgently with your Government the question of our military expenditures in China. I should like to suggest that the formula which General Stilwell and Ambassador Gauss are authorized to propose be adopted tentatively on the understanding that our Army expenditures in China during the next few months can be expected to be somewhere in the neighborhood of twenty-five million U. S. dollars each month. In this connection I should like to assure you that, on the assumption of full Chinese cooperation which I confidently expect, this Government is fully prepared to bear all costs of its own war effort in China including housing and subsistence of troops as well as construction.

  1. Ante, p. 852.
  2. Bracketed paragraphs in this memorandum appear in the original.
  3. Not printed.
  4. Post, p. 859.
  5. Marginal notation: “Dept’s draft of Jan. 20 approved by Sec. & sent to War & Treasury.”