The Ambassador in China (Gauss) to the Secretary of State
[Received July 22—11 a.m.]
1276. Apparently scope of authority of Chinese Supply Commission, Washington, not yet fully settled here. Re your 965, July 17, 2 p.m. It has been set up primarily to handle lend-lease. Opinion here is that it desires also to handle post-war reconstruction projects. There is doubt in some quarters whether it is capable of doing so. However, Kung27 is believed to have been given considerable discretion. Cabinet Ministers here are telegraphing Kung for clarification and we understand Kung’s recommendation is also being sought whether former China Defense Supply operations here should now be taken over by Minister of War28 or entrusted to Central Trust. Embassy believes Kung will likely endeavor to concentrate authority in Central Trust here and Chinese Supply Commission, Washington, and will also endeavor to control official post-war reconstruction projects. We will continue to follow the matter and report when situation is clarified.