Memorandum by the Assistant Secretary of State for Economic Affairs (Clayton) to the Under Secretary of State (Acheson)

I have attached hereto a draft agreement39 under Section 3 (c) of the Lend-Lease Act which we are proposing to sign jointly with representatives of the Chinese Government on or before June 30, 1946.

The components of the agreement have been authorized by you in the past in reply to specific requests I have set before you for authorization, but I believe you will desire to see the picture as a whole in an agreement that may, at some early date, be made public.

The three major components of the agreement are as follows:

The provision of goods and services up to an amount of $25 million from July 1, 1946, to October 31, 1946 to complete the repatriation program and the reoccupation of formerly occupied areas of China;
The provision of supplies and services in support of Chinese forces engaged in the occupation of Japan, in an amount determined by the Senior U. S. Commander in Japan to be necessary to supplement supplies and services available to Chinese forces from Chinese resources;
The continuation to December 31, 1947 of a program of training Chinese air cadets in the United States, begun before V–J Day and authorized by the President, at the request of the Generalissimo, to be continued; the initiation of a new training program in the U. S. for Chinese ground and medical officers, at the request of the Chinese Ministry of War and supported by General Marshall and the U. S. Commanding General, China Theatre; the continued provision of naval maintenance supplies and services for U. S. naval vessels transferred to China under the Lend-Lease Act before June 30, 1946, and continued training of Chinese naval personnel at Tsingtao.

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Except for the airforce training program, the draft agreement is limited in its reference to programs of assistance after June 30, 1946. The agreement provides that all the subject programs will be paid for by the Chinese Government against bills to be rendered. This is without prejudice to the settlement for lend-lease assistance made available to China prior to June 30, 1946. However, in the case of the airforce training program, the agreement provides (in Article III) that bills to be rendered will cover costs incurred by the U. S. in the period November 30, 1945 through June 30, 1946. This is in accord with the Generalissimo’s note to the President of November 14, 194540 urging the continuation of the program and stating that his Government expected to bear the costs of the program from November 30, 1945 forward under an agreement to be concluded between the two Governments. It is further in accord with the understanding of the Secretary of State when on February 12, 1946, he authorized the War Department to proceed with the air training program under assurances of reimbursement for expenditures made after November 30, 1945.

We have met some resistance from Chinese representatives in Washington on the matter of incorporating in the 3 (c) agreement a reference to Chinese obligations to pay for the airforce training program from November 30, 1945 to June 30, 1946, and it may be that this matter will have to be referred to you for further action.

In the event the agreement is signed, I should like your instructions as to the advisability of making it public at the time of signing.41

  1. Not printed.
  2. See telegram No. 1973, November 14, 1945, 8 a.m., from the Chargé in China, Foreign Relations, 1945, vol. vii, p. 629.
  3. Marginal notation by Mr. Acheson: “O. K. Please speak with me before giving out text of Agreement or any press release so that we can clear with General Marshall.”