Nanking Embassy Files, Lot F79, 820 Surplus Property: Telegram

The Consul General at Shanghai (Josselyn) to the Embassy in China

14. For Marshall from Howard and Johnson, Foreign Liquidation Commission:

“Refer to 90012 and overall instructions in 91760.66 The Chinese Government has formally rejected FEA surpluses in India excepting supplies physically in Calcutta. The Calcutta stockpile comprises approximately 35,000 tons, of which 28,000 tons are approximately 5700 Dodge trucks (in view of 90760 [91760] we will not engage in discussion with Chinese Government on Calcutta supplies as to price or terms until instructed by you). Our recommendations are, considering that trucks are new, all but 107 still in crates, China’s intense interest in Calcutta stockpile and that she is selectively purchasing, that the price on Calcutta stockpile be cost plus all transportation and that the full amount be set off against the Department [debt?] of the United States in United States dollars to China for the Chinese national currency advanced to the United States Army. There is [Page 1065]very active market for these same trucks and supplies in the Philippines and other areas and Foreign Liquidation Commission can sell for cash for full price. We are informed that the United States has an equally strong obligation to rehabilitate the Philippines as well as China. According to our information the estimated value of Calcutta stockpile, without transportation, is approximately 23 million dollars. Transportation would be 25% for landing in Calcutta plus actual cost of transportation from Calcutta to China. It is to be remembered that China has already once refused to buy this property and that consequently any moral obligation of our selling to China, though the supplies were originally procured for China Lend Lease, is questionable.”

[Howard and Johnson]
Josselyn
  1. Telegram No. 91760 of January 6, not printed; it contained the text of President Truman’s instructions to General Marshall. The text of the instructions was conveyed to the Embassy in Department’s telegram No. 2022, December 19, 1945, Foreign Relations, 1945, vol. vii, p. 1376.