893.51/6–745

Memorandum by the Chinese Minister for Foreign Affairs (Soong) to the Secretary of the Treasury (Morgenthau)61

I gladly welcome your suggestion about setting up a reconstruction fund as a joint enterprise of the United States and Chinese Governments. The war is coming to a close and planning for the recovery and reconstruction of China is an urgent necessity. The reconstruction of China is of course an integral part of the Sino-American policy to make China a strong power and to enable China to fulfill her role in helping to insure stability in Asia and the Pacific. It seems to me that such a fund is one of a number of aspects of the problem that should be worked on by us jointly. The fund alone, divorced from actual planning, will have little meaning and will not be well received.

I would suggest that we decide to prepare jointly a general program. Some tentative plans are already available both on the American and Chinese side, such as the Yangtze Gorge Project, the Taub industrialization scheme,62 the plans of the National Resources Commission, the Ministry of National Economy, and others.

The essence of any plans finally adopted will consist in obtaining from the United States the capital goods, machine tools, transport facilities of various types, as well as facilities offered both by the United States and Chinese Governments to encourage American investment in China.

It is obvious that more than 500 million dollars will be necessary to carry out this plan. Furthermore, it will need both Chinese and American capital for this purpose. Only by joint collaboration in planning and financing can we carry out a relatively rapid Chinese reconstruction. Only from the United States can we secure the necessary machines from the vast production facilities created by your war effort.

Consequently, it seems to me that we should proceed immediately to joint discussion of this whole problem not confined to any one part of [Page 1087] it, and seek to arrive at a comprehensive mutual agreement as to our future policy, plans, and financing. I am here to do it if you are ready.

  1. Attached to letter of May 9 from Dr. Soong to Secretary Morgenthau, supra.
  2. This took its name from Alex Taub, Chief Engineer of the Engineering Service, Foreign Economics Administration.