Marshall Mission Files, Lot 54–D270: Telegram

Colonel Marshall S. Carter to General Marshall, at Nanking

95432. The following message is transmitted at the request of Mr. Thomas B. McCabe, Foreign Liquidation Commissioner:

“Part 1: War Department is critical of tentative agreement of June 16 and June 2130 by Vogelback and Mr. Howard with Dr. Soong on the basis that it may involve too much work on the part of the Army in the field to implement it and the necessity of retaining Army personnel in the field beyond the time otherwise required.

“Part 2: As a result of Army criticisms other methods and plans for accomplishing the same results (1) the liquidation of the surplus in Pacific and (2) the strengthening of the economy of China have been examined by State, Treasury, War, Navy and OWME during the last 3 weeks.

“Part 3: Consensus of opinion here is that if possible the deal should be made on the basis of a lump sum price which would eliminate the necessity of any further accounting of the property transferred to China. It is felt here highly desirable that payment for a lump sum purchase by China should be an exchange of the balance remaining in the Yuan account plus the real estate required by State Department and perhaps a credit established in China for educational, scientific and cultural purposes. This would obviate necessity for fixing exact procurement cost of property transferred as well as for fixing the exact amount of the Yuan debt.

“Part 4: Negotiation of an agreement along this line is so complex and involves the interests of so many different departments of the government that it is felt here by highest authorities including OWME, State, War, Navy and Treasury that a mission composed of Under or Assistant Secretary of War, Assistant Secretary of the Navy, an authorized representative of Treasury and myself should go to China at once to confer with you and with your guidance close a deal with China if possible on the spot along the lines indicated in Part 3 or on any other basis that the circumstances warrant.

“Part 5: This mission will proceed only if you think it desirable and with your full concurrence in its objectives. Therefore urgently request your immediate reply.

[Page 1045]

“Part 6: Chinese here have not been contacted concerning thinking reflected in Part 3 or trip proposed in Part 4. Signed Thomas B. McCabe, Foreign Liquidation Commissioner.”

For your information Mr. McCabe has exerted continuous maximum effort to obtain complete agreement here to the form and basis of a surplus property deal which would harmonize with your objectives. I have followed the matter closely and agree that the proposed trip represents the quickest and most efficient method of closing a deal satisfactory to China and consistent with US interests, subject, of course, to the appropriateness of the arrival in China at this time of the high level group suggested above.

  1. See memorandum by Mr. Vogelback, June 22, p. 1041.