893.24/3–2646
Mr. H. Wendell Endicott to the Secretary of the Treasury (Vinson)
Dear Mr. Secretary: An agreement is presently under negotiation for the sale to the Republic of China of a quantity of surplus property, located overseas, of a character useful in the construction and operation of dockyard facilities. The proposed agreement provides for the payment by China of the fair value of the property in installments over a period of thirty years. It also grants to the United States an option to use Chinese dockyard facilities and services for the maintenance and repair of United States Navy and government-owned ships, within certain limits, and to credit the value of that use against the current installment obligation.
It is contemplated that the option to utilize the Chinese facilites will be exercised by the United States only when the Navy Department or other interested Department of the Government so desires, and it is understood that, in the event of the exercise of the option, the amount credited to the Government of China under the terms of the contract will be charged against the appropriation of the Department responsible for the exercise of the option.
In the absence of advice from you to the contrary, I shall assume that you have no objection to the agreement and the procedure as I have described them.
Sincerely yours,