Foreign Relations of the United States: Diplomatic Papers, 1945, The Far East, China, Volume VII

124.936/4–1145

Memorandum by the Second Secretary of Embassy in China (Boehringer)¹⁵

[Chungking,] April 3, 1945.

The 18th weekly meeting of representatives of U. S. agencies in Chungking was held at the Embassy at 10:30 a.m., April 3, 1945. Mr. Atcheson, Chargé d’Affaires, a. i., presided. The following attended:

[Here follows list of those present.]

Agenda and Summary

1. President’s letter of March 20, 1945 directing that civilian economic activities abroad be conducted under the responsibility of the Chief of the Diplomatic Mission (Department’s circular telegram of March 29 [30], 1945¹⁶). Text read by Mr. Atcheson who pointed out the relevance of this important directive to the work which will be undertaken by Mr. Briggs, whom he then introduced.

2. Statement by Mr. Ellis O. Briggs, Minister-Counselor of the Embassy, regarding the scope of his activities.

3. Statement by Mr. Leon Henderson, Advisor to the Chinese Government, concerning the progress of his study of price control and related matters.

4. Statement by Dr. C. F. Remer,¹⁷ Department of State, on special assignment to study financial aspects of Chinese postwar reconstruction plans.

5. Statements by Mr. William L. Holland, Acting Director, and Mr. Brooks Darlington, Executive Director, China Division of the OWI.¹⁸

1. President’s directive concerning the assumption by the Diplomatic Mission of overall economic responsibility.

Mr. Atcheson explained that this directive sent to the agencies listed therein was of such importance that he desired to read the text into the record. It is as follows:

“There is quoted below for your information the text of a letter of March 20 sent by the President on March 24 to the heads of the 16 departments and agencies cited in connection with a centralization of responsibility for economic activities of the missions:

“‘Much good work has already been done to assure that the economic personnel of the various Government agencies, who are stationed abroad, work together as a team; but I should like to see this trend carried further. Effective foreign operation demands a centralization in each country of responsibility for the activities of all of our civilian economic representatives. I realize that it is not often feasible for the chief of mission to take upon himself personally the task of supervising the activities of the economic personnel within his area, and that in a number of cases the chiefs of mission have delegated their authority in such matters to principal economic officers. I would like to see the application of this principle extended to the end that the activities abroad of economic personnel of all civilian agencies be supervised in each country by an economic counselor, or where appropriate, an economic minister, of course, on the payroll of the Department of State. I shall give you all necessary assistance in the realization of this goal which is of great importance in the effective conduct of our foreign economic relations.’

“The following is the list of agencies to whom the above communication was addressed by the President: the Treasury, the Interior, Labor, Commerce, Agriculture, FEA, the War Shipping Administration, the War Food Administration, the WPB, the Petroleum Administration for War, Coordinator of Inter-American Affairs, the Tariff Commission, Attorney General, the Reconstruction Finance Corporation, U. S. Commercial Company, and the Bureau of the Budget.”

Mr. Atcheson stated that the relevance of this instruction to the work to be undertaken by Mr. Briggs was self-evident. He thereupon introduced Mr. Briggs, explaining that he had come to China to take up duties as Minister-Counselor of the Embassy and that he had been specifically delegated to undertake the task of integrating and coordinating certain activities of various government agencies represented in China. Mr. Atcheson said that Mr. Briggs had a very distinguished record in the Foreign Service; that he, Mr. Atcheson, had had the pleasure of working with him in Washington several years before; that the other representatives would find him most cooperative and anxious to be of all possible service and assistance to his colleagues. Mr. Atcheson bespoke for Mr. Briggs from all the representatives a continuation of the excellent and much appreciated cooperation the Embassy had been enjoying from them.

2. Statement by Mr. Briggs.

Mr. Briggs stated that he had arrived in China five days before and that he looked forward to an extraordinarily interesting and fruitful assignment, the success of which, insofar as integrating American activities was concerned, would obviously depend on the one hand on his ability to familiarize himself with the work of the various branches of the American Government represented at the meeting, and on the other hand on the assistance and collaboration which he received from those representatives, bearing in mind that China is a new field for him and bespeaking the patience of his colleagues during this educational process.

Mr. Briggs said further that he planned to devote an initial period to a study first of the operation of the Embassy itself, which has been functioning under various handicaps inherent in wartime temporary capital conditions and with a reduced personnel; he proposed thereupon to undertake a similar study of the activities of the various agencies, following which he hoped to be in a position to review the situation in extended discussions with the officers concerned.

As to the general overall problem, he indicated that he desired to refresh his own memory regarding the objectives of our Government in China, in which connection certain confidential documentation recently prepared by the Division of Chinese Affairs in the State Department seemed particularly pertinent, concise and well put. He thereupon read the following:

“The principal and immediate objectives of the United States Government are to keep China in the war against Japan and to mobilize China’s full military and economic strength in the vigorous prosecution of the war. To accomplish these objectives the United States Government has undertaken the following measures: (a) direct military assistance to China and the Chinese armed forces; (b) promotion of effective Sino-American military cooperation; and (c) encouragement to the Chinese to contribute their maximum effort in the war.

“The American Government’s long range policy with respect to China is based on the belief that the need for China to be a principal stabilizing factor in the Far East is a fundamental requirement for peace and security in that area. Our policy is accordingly directed toward the following objectives:

• “1. Political: A strong, stable and united China with a government representative of the wishes of the Chinese people;
• “2. Economic: The development of an integrated and well-balanced Chinese economy and a fuller flow of trade between China and other countries; and
• “3. Cultural: Cultural and scientific cooperation with China as a basis for common understanding and progress.”

Mr. Briggs stated further that obviously his own activities as well as those of every American official in China must be directed first and foremost to the short-range and immediate objective of winning the war against Japan, without which no other objective could be realized. He therefore wished to pledge his own activities to assisting in every way possible in canalizing the activities of the several civilian agencies in ways helpful to the war effort and to our military campaign.

In conclusion Mr. Briggs stated that in his opinion an excellent start in the direction of coordinating activities had been made by Ambassador Hurley in instituting the custom of weekly meetings, the summaries of which had proved of inestimable value to him in identifying the manifold activities of our Government in the China theatre. These meetings would be continued and he hoped those present would come forward with suggestions for improving still further their effectiveness.

3. Statement of Mr. Leon Henderson.

Mr. Henderson stated he had found that the problem of retarding China’s inflation was not just a problem of price control and that nearly every phase of the problem which he had studied had political, military and economic implications. He said he had found it desirable to look into the question of Chinese Government administration which he believed provided one of the keys to solving the inflation problem. He said that he had discussed the Government’s reorganization efforts with appropriate Chinese officials and from these preliminary discussions had reached the conclusion that what was needed here was an organization similar to the Secretariat of the British War Cabinet.

Mr. Henderson went on to say that Chinese Government revenues and taxation were acute questions concerning which he required more information. He said that although he wished to avoid discussions on foreign exchange and postwar currency stabilization he found that some Chinese officials to whom he spoke desired to include those topics in the discussions. Mr. Henderson said he would appreciate receiving from those present any information on the following points: operations of the Food Ministry, Communications Ministry, and Government arsenals; distribution of commodities to Chinese Government officials; estimates of food production; data on the purchasing power of the Chinese dollar; relationship between goods and currency; trend of U. S. Army expenditures in China; budget analyses; breakdown of methods by which the ministries have adjusted both salaries and official prices in recognition of the rising price level; and double and triple bookkeeping methods by which tax payments are evaded.

4. Statement by Dr. C. F. Remer relative to his study of financial aspects of China’s postwar reconstruction plans.

Mr. Atcheson welcomed Dr. Remer who stated that he had reached China several weeks before to undertake on behalf of the Department of State a study of postwar reconstruction plans, in regard to which he would be in a position to report further at a later date. Dr. Remer likewise indicated—and requested that the information be regarded as secret—that he had been directed to examine the subject of Japanese reparations to China, an item on his agenda which he does not desire to become known to the Chinese Government at this juncture. He said that he would appreciate receiving any information on official Chinese views in the premises which other representatives and agencies may already have.

5. Statements by Messrs. Holland and Darlington concerning the work of the OWI.

After his introduction by Mr. Atcheson, Mr. Holland stated that he was particularly aware of the need for unified direction, in view of the fact that OWI’s psychological warfare work is under the direction of the U. S. Army while all other operations are under the general direction of the Embassy. As to immediate plans for his work, Mr, Holland stated that the leaflet dropping work of the OWI would probably be much expanded; that OWI hoped soon to accept an offer from the (Kuomintang) Ministry of Information to conduct relay broadcasts from San Francisco through the Chinese station at Kunming in languages other than Chinese; that OWI, subject to the Embassy’s approval, planned to set up several additional branch offices in free China; that he hoped to increase the volume of books, pamphlets and other printed material reaching China from the United States, provided this did not conflict with any program of the Embassy, and of course providing transportation facilities permit; and finally that the Chinese were urging a closer working arrangement with OWI in psychological warfare, which however was not at present favored by OWI.

Mr. Darlington referred to the success of OWI in obtaining acceptance by the Chinese press of articles describing U. S. Army and other activities of our Government in China. He indicated that very gratifying progress had been made in this connection.

The meeting was adjourned at 11:20 a.m.

Carl H. Boehringer

15. Copy transmitted to the Department by the Chargé (Briggs) in his covering despatch No. 291, April 11; received April 20.
16. Text quoted below, p. 81.
17. Charles F. Reiner, Adviser on Far Eastern investment and finance, Division of Financial and Monetary Affairs.
18. Office of War Information.