893.24/1–2646: Telegram

The Counselor of Embassy in China ( Smyth ) to the Secretary of State

166. From General Marshall to Colonel Davis: Estimates of Agriculture Attaché Dawson indicate that China’s needs for cotton imports are not more than 550,000 bales for the next 6 months. Refer explanation Shanghai 260, November 2450 (Reurtel 13551). I therefore recommend coordination of shipment of China loan cotton imports and UNRRA cotton imports to prevent their exceeding this maximum, unless it becomes necessary to revise above estimates upward as a result of increase in factory operations more rapid than at present anticipated. Cotton shortage in Shanghai now acute, but as soon as this situation is remedied desirable to reconsider UNRRA cotton imports to avoid excessive accumulation of stocks on hand by Chinese or alternatively to ship bulk of loan cotton after mid-year.

2. I agree with recommendation in last sentence of your message. [Marshall.]