893.24 FLC/7–3147: Telegram

The Consul General at Shanghai (Davis) to the Secretary of State

1862. Official Central News Agency distributed following story 26th:

“Shanghai—In connection with the Associated Press cable from Washington under the date of July 22 and published in the local papers yesterday regarding American surplus property turned over to China, the Board of Supplies of Executive Yuan of the Chinese Government has issued the following statement:

As the figures contained in the Washington cablegram are apt to give to the general public a wrong impression about the actual quantity of surplus property received by China up to date, it is desirable to make clear that of the total estimated worth (original procurement cost) of U. S. $500,000,000 of movable property which the United States Government intended to turn over to the Chinese Government under the over-all agreement of August 30, 1946, only material and equipment costing U. S. $170,000,000 have been declared surplus, but this will not be all acquired by China as the declarations are subject to checkings and withdrawals. As far as the U. S. $500,000,000 bulk sale of movable goods is concerned, China actually received about U. S. $71,000,000 up to June 30, 1947.

The U. S. $324,000,000 of property referred to under item 1 in the announcement is not a part of the U. S. $500,000,000 bulk sale. This figure obviously represents the cost of fixed installations (U. S. $84,000,000,000), covered by the same over-all contract of August 30, 1946, and the few deals such as the Calcutta stockpile,52 small ships,53 miscellaneous sales, etc., which were closed prior to the signing of the over-all agreement and cannot be regarded as coming under the U. S. $500,000,000 movable property bulk sales.

The statement that the United States in the 9 months has turned over to China or ‘made available’ to her American surplus property originally costing U. S. $500,000,000 is misleading. Under the overall agreement signed on August 30, 1946, the United States Government has yet to make available to China U. S. $330,000,000 worth of surplus property.”

  1. For correspondence on this subject, see Foreign Relations, 1946, vol. x, pp. 1060 ff.
  2. For correspondence on this subject, see ibid., pp. 785 ff., passim.