The Acting Secretary of State to the Administrator of the War Assets Administration (Littlejohn)

My Dear General Littlejohn: In extension of my letter to you of August 5 [6], and a memorandum on the same subject from the Policy Committee on Arms and Armaments, dated August 13,55 it is considered desirable to point out that two separate actions are required prior to actual delivery of armaments in China. The sale of surplus armaments by the War Assets Administration to the Chinese Government is contingent upon the understanding that such armaments are destined for an integrated and representative National Army under a coalition government, and that even under these conditions the contract may be terminated by the United States at time of delivery, if such action appears to be in the best interests of the United States. The issuance by the Department of State of an export license for such armaments is contingent upon the same understanding, particularly the question of timing of delivery in China as it affects the best interests of the United States.

It is reasonable to assume that the Chinese Government may wish to consummate sales of certain armaments at this time, even though conditions are such that export licenses could not be issued now or in the immediate future. The Department of State would interpose no objection to such sales, providing the Chinese Government was made fully aware that such action did not commit the United States Government to an immediate issuance of an export license. At the same time, there are some types of military end-use items for which export licenses could be issued concurrently with consummation of their sale without adversely affecting the best interests of the United States.

For the foregoing reasons, I believe that the closest coordination should continue to be maintained between your Administration and the Department of State on each proposed sale on an individual basis, so that the Chinese Government may be kept accurately informed as [Page 757] to the possibility of obtaining an export license for such armaments prior to signing of the sales contract.

Sincerely yours,

Dean Acheson
  1. Latter not found in Department files.