The Chargé in China ( Atcheson ) to the Secretary of State
[Received 2:32 p.m.]
585. Leon Henderson,33 who arrived March 25, is returning to United States with T. V. Soong and will probably have opportunity at Cairo to talk with Ambassador Hurley. Henderson appears in very short time to have obtained comprehensive and accurate picture of situation here and of numerous and varied facets of the problem before him. As a result of his survey, he is considering recommending to the Generalissimo that there be set up in the Chinese Government a powerful committee or secretariat on the lines of the British War Cabinet secretariat or our OEM34 to guide and coordinate appropriate activities of various Government agencies such as Communications Ministry (in connection with transport control) and Food Ministry. As envisaged, this organization would have an American of a stature similar to Henderson’s as chief advisor and competent American advisors for such fields as price control, governmental budget, taxes, et cetera. As regards price control, we believe Henderson understands thoroughly that there is lacking here, among other things, both the governmental administrative machinery for operation of such control and A-1 officials, merchants and the public, the will to make such controls effective. Henderson’s planned efforts in this direction may therefore he limited to some essential commodities as suggested in memorandum summarized in our 533, March 29, 2 p.m.35
Henderson is also recommending more efficient check on government receipts and expenditures for which purpose he also hopes to obtain American advisors. He seems confident that T. V. Soong will strongly back his recommendations with the Generalissimo and will support more effective delegation of economic powers than now exists. We consider Henderson’s visit has already served a very useful purpose and that his ability, energy and evident sincerity of purpose have favorably impressed all Chinese officials encountered. Adler, Kearney36 of Chinese WPB and Joyner agree that his recommendations are sound and merit our support.
Repeated to Cairo together with our 533, March 29, 2 p.m.