Marshall Mission Files, Lot 54–D270: Telegram

General Marshall to Colonel Marshall S. Carter

917. Please transmit for me the following message23 to McCabe, FLC.

Part 1: Soong has agreed to price of 22% subject to many details of contract to be worked out.

Part 2: Agreement is made on basis that return to United States of new and good condition excess property be stopped at once. Such property is needed to carry the junk which will be left if return is continued. General Marshall requests that action be taken at once to enable FLC to help him carry out his mission by making this contract with China.

Part 3: As greatest part of excess property left in Pacific and China is located in bases in Philippines, and as balance left after Philippines have been given 100 million worth of surplus property under the Tydings Bill24 will still be a large part of what China buys, it is absolutely necessary that the Philippines agree, in advance of the execution of the proposed contract, that Chinese Nationals, under proper supervision of both responsible Chinese officials and the United States Army and Navy, be permitted to enter the Philippines and remain there long enough to receive the property from the United States, prepare it for outloading and outload it for removal to China. It is felt that this agreement must be made on a government to government level and should be expedited, as contract with China depends upon its successful negotiation. General Marshall requests the appropriate action.

[Page 1041]

Part 4: Credit will have to be sufficient after exhaustion of United States loan [yuan] debt to China, to pay United States for property, pay fees of first class engineering force [firm] to plan, organize and manage the large operation of clearing the property from its present location, technical assistance in reconditioning part of property (it is [contemplated] that after study it may be found to be advisable to recondition some of property at bases before shipping to China), shipping expenses to China and a limited amount of expert assistance in marketing property in China. Credit is not to be extended for Chinese labour, its logistic support and any equipment, services and facilities available to China.

Part 5. Howard is returning to Washington in few days with representative of Chinese Government to explain situation, but action requested in parts 2 and 3 should start immediately and not await his arrival. No publicity.

  1. This message was also signed by Mr. John K. Howard, Mr. William E. Vogelback, and Brig. Gen. Bernhard A. Johnson. Mr. Vogelback was the appointed Central Field Commissioner, Pacific and China, OFLC.
  2. Approved April 30, 1946; 60 Stat. 128.