Marshall Mission Files, Lot 54–D270: Telegram
Colonel Marshall S. Carter to General Marshall
81589. Your 148965 refers. War and State Departments agree that the 3c lend lease agreement of 28 June 1946, cannot be legally altered, either in point of time or monetary value. Two immediately available alternative solutions remain, either of which is acceptable to War and State.
The first is to have a representative of the Chinese Govt sign a receipt for the purpose [purchase?] the property in order to effect transfer prior to 31 October 1946, with custody and possession remaining [Page 761] with United States until integration begins. This would apparently necessitate reopening the question with the Generalissimo, the merits of which can only be decided in China. Further, pilferage claims arising during the time in U. S. custody might complicate ultimate settlement of the account.
Secondly, the equipment can be retained by U. S. for subsequent declaration as surplus and sale to the Chinese Govt.
For those portions which are clearly munitions of war, approval of SWNCC would be necessary at such time as surplus sale was consummated, but this should not be difficult if conditions in China warrant the transfer. This method should meet with the least resistance both here and in China and prove to be the most workable in any turn of events. Chinese should understand, however, that this method is not a part of the overall surplus sale, and payment will be expected on same basis as for lend lease transfer.