893.24/10–1145
Memorandum of Conversation, by the Deputy Director of the Office of Far Eastern Affairs (Penfield)
Mr. Maxwell58 and Commander Parkin59 telephoned this morning to state that, in accordance with standard practice, the Army is now demilitarizing certain equipment in China before turning it over to [Page 1168] ANLC for disposal as surplus property and that the War Department has indicated that it has no objection to the sale of this equipment to the Chinese without being demilitarized. Mr. Maxwell and Commander Parkin inquired whether the Department would be justified in accepting the equipment without demilitarization on the assumption that it would be in accordance with our policy later to dispose of it to the Chinese.
I stated that it was my impression that the United States is committed to the completion of the so-called 39–division program, that I understood there were still some supplies for that program to be shipped from the United States, and that I thought if the surplus equipment now being turned over to ANLC in China could be substituted for the equipment still to be shipped on the 39-division program we could safely accept this equipment without demilitarization. I also said that, as there is so far no United States commitment for military aid to China over and above the 39-division program, if the surplus equipment in China could not be applied to this program as originally set up it might be advisable to allow the equipment to be demilitarized before it is turned over to ANLC. I suggested that Commander Parkin get in touch with Colonel Byroade60 or some other officer in OPD who would be able to explain just how the surplus equipment might be fitted into the 39–division program.
The conversation closed with the understanding that if surplus equipment can be used in the 39-division program it will not be demilitarized but that if it cannot be used in this program it will be demilitarized before being turned over to ANLC.