893.50/7–1445
Memorandum by the Director of the Office of Far Eastern Affairs (Ballantine) to the Under Secretary of State (Grew)
At the end of June and again on July 12, 1945, Generalissimo Chiang Kai-shek appealed through the medium of press interviews for added military-economic assistance to China to aid that country in the prosecution of the war.
Knowing that the United States is exerting every effort to send maximum aid to China “over the hump”, it must be concluded that the Generalissimo, although he does not say so specifically, is calling for American military-economic assistance by way of the East China coast—a portion of which (that stretch lying between Ningpo and Amoy) would now appear to be open to American landings without appreciable opposition from the enemy.
Recent reports from China indicate that, although the military situation and the status of the Chinese army have improved substantially in recent months, the resulting strain on China’s economy has been severely intensified. Commodity prices have more than doubled since the beginning of the year and inflation has reached the “snowball” stage.
[Page 138]Dr. Arthur N. Young, former Economic Adviser in the Department and presently Financial Adviser to the Chinese Ministry of Finance, has recently expressed the view in informal conversation with officers of FE71a that American landings on the China coast—even of a token nature—would have very beneficial effects on China from the psychological and economic points of view. In his opinion, even token economic assistance to China by this route would tend to check the present alarming trend toward runaway inflation and at the same time accelerate China’s war effort.
You may wish, in your informal discussions with the Secretaries of War and the Navy, to point out the advantages from a political, economic and psychological point of view of early American landings on the China coast, as above outlined.
- Office of Far Eastern Affairs.↩