Memorandum of Conversation, by Mr. Charles P. O’Donnell of the Division of Commercial Policy

Participants: Dr. Ta-Chung Liu, Assistant Commercial Counsellor, Chinese Embassy
Dr. S. C. Wang, Chairman, Chinese Supply Commission
Mr. Brown, CP2
Mr. Gay, CP3
Mr. White, CP4
Mr. Woodard, FE5
Mr. O’Donnell, CP

At our request, Dr. Liu and Dr. Wang came to the Department to discuss questions of policy concerning the operation of the Chinese Supply Commission.

Mr. Brown explained that the Department is asking the representatives of countries having purchasing missions in this country to discuss the present operations of their missions and their future plans for them. Mr. Brown explained that this Government believes that international trade should be returned to private channels as soon as practicable. He pointed out that we were fully appreciative of the enormous difficulties confronting China in the work of rehabilitation and that the policy statement we presented to the Chinese representatives in the aide-mémoire on purchasing missions had taken this consideration into account.

Mr. Wang said that the Chinese position was unique and that there was nothing in China which made it possible to go back to individualistic purchases immediately. He thought that some sort of plan somewhere between Amtorg6 and laissez-faire might have to be worked out to deal with Chinese trade problems. He expressed the belief that it would be disastrous to do away with the Chinese Purchasing Mission at once. He said it would be first necessary to build up Chinese economy [Page 1397] and then unfreeze controls in the same way OPA7 controls might be demobilized in the United States. Mr. Wang said that if the restoration of private trade in certain commodities resulted in only a slight increase in the price for that commodity, there might be no objection to such trade. However, there were many other products where the savings made by the purchasing commission were substantial. He thought that two or three years of purchasing mission activity might be necessary to accomplish the objective of building up China’s economy.

In reply to a question, Dr. Wang said that if importers telegraphed him money to buy for them, he would be glad to arrange for such purchases, but this had never been done. Dr. Liu asked Dr. Wang if it were not true that the purpose of the Purchasing Mission was to purchase for government account and that there had never been occasion to determine whether the Mission had the authority to purchase for private business. Dr. Wang’s reply was non-committal.

Mr. Brown asked the Chinese representatives to present their views on our purchasing mission policy in writing and to indicate their future plans for operation as soon as it is convenient.

This meeting was held in Mr. Brown’s office, April 9, 1946, at 9:30 a.m.

  1. Winthrop G. Brown, Chief of the Division of Commercial Policy.
  2. Merrill C. Gay, Assistant Chief of the Division of Commercial Policy.
  3. Cecil Thayer White.
  4. Granville O. Woodard, of the Division of Chinese Affairs, Office of Far Eastern Affairs.
  5. Soviet Government trading organization in the United States.
  6. Office of Price Administration.