The Ambassador in China (Stuart) to the Secretary of State
[Received May 31—9:25 a.m.]
1184. There follows text of letter from Foreign Minister to me together with its memorandum enclosure concerning distribution of foodstuffs under post-UNRRA relief program in China:
“On behalf of Chinese delegates I am sending you herewith a memo on post-UNRRA relief aid which is based upon result of discussions between representatives of Chinese Government and of your Embassy. As this matter is very urgent, I hope you will be kind enough to transmit immediately suggestions contained in this memorandum to your Government. An early reply will be much appreciated.
“Memorandum on Foodstuff Distribution Under the Post-UNRRA Program
“The suggested agreement between the U. S. and countries which are recipients of post-UNRRA relief sets forth certain conditions with regard to distribution (article II paragraphs (a) through (f)) to creation and utilization of sales proceeds (article III) and to maximization of both indigenous production and equitability in internal distribution (article IV). The Chinese Government, having an urgent [Page 1309] and growing need for continued relief assistance after food supplies contributed by UNRRA have been exhausted, will endeavor to meet those conditions to greatest extent possible. Following measures are proposed in connection with foodstuff distribution under post-UNRRA program:
- Controlled distribution of foodstuffs to manageable population groups. Chinese Government will inaugurate a plan of controlled food distribution to economically significant categories of citizens in large urban centers. To begin with, this plan will be initiated in metropolitan areas on or near China coast including Shanghai, Nanking, Canton, Foochow, Swatow, Amoy, Tientsin, [Peiping], and Tsingtao. In these centers controlled distribution will be applied tentatively to direct-relief and institutional claimants; civil servants including police, teachers and students, industrial workers, communication and transport workers, unskilled laborers where sufficiently organized, and other special categories.
- This system of controlled distribution will be initiated in areas mentioned and within groups specified as quickly as administrative arrangements can be completed, including availability of foodstuffs to insure regular allotments to groups being serviced. First steps will be taken in Shanghai where detailed plans have already been drawn and where further delay would endanger social stability. Similar plans will be put into force in other cities as soon as national and municipal government services involved agree upon details. Pending decision on final amount of post-UNRRA appropriation for China, it is estimated that a minimum requirement of 300,000 tons of food in 6 months through November will be necessary for proposed program in areas mentioned. Of this amount at least 200,000 tons will be rice. Further details as to requirements and methods of distribution will be submitted later.
- Rationing. The proposals described in paragraph 1 above would be incomplete in meeting the needs of the critical population areas unless they were supplemented by a direct rationing program to unorganized majority of urban population. Program will begin from lower income groups and is to be extended gradually to entire unorganized populace. Establishment of identification systems, ration units and controlled sales outlets will however require tremendous organization and staff work, particularly when rationing has not previously been attempted by National Government in most of these large cities. Perfection of system, therefore, will probably take a longer period to put into useful effect than direct controlled distribution to particular groups. Ration program will require approximately 390,000 tons of food.
- Relief and work projects. The direct distribution of relief supplies in interior of China as previously attempted with UNRRA supplies is a program which cannot be continued because of lack of internal transportation facilities. Nor is it feasible to institute a system of rationing in most parts of interior. The only way to meet these substantial relief needs is therefore through direct-relief and work projects. Most urgent of such projects including Yellow River area reclamation project, conservancy projects of Tangku Harbor [Page 1310] and Yungting River, relief projects for famine areas of Hunan, Kwangsi and Kwangtung, et cetera, are being submitted as part of Chinese post-UNRRA requirements. These, according to present plans, will be financed from proceeds of sale of post-UNRRA supplies in urban areas under direct-distribution schemes. A list of projects with descriptive information and food requirements involved, as well as estimated local currency requirements, is to be submitted at a later juncture.
- Use of foreign agencies and advisors. The Chinese Government, while recognizing need for mobilizing all Chinese who have been trained in relief and welfare activities, also realized necessity of recruiting assistance from foreign experts particularly those who have had previous experience in China. Foreign voluntary agencies in China will also be invited to furnish advisors and help in work of relief and work projects when so requested by Chinese Government.
- Efficient utilization of indigenous production. The measures outlined in preceding 4 paragraphs affect utilization of indigenous Chinese food production in 2 particularly important ways. By establishing means of coordinated and controlled distribution in large urban centers, existing congestion of internal transportation facilities will be reduced and present pressure on internal regions which are deficit food producers to contribute to needs of adjacent cities will be reduced. In other words, utilization of imported food supplies to greatest extent possible in coastal areas will permit more equitable distribution and utilization of indigenous stocks in interior and will induce greater productivity.
- At same time Government recognizes that needs of urban centers cannot be met from imports alone. Inadequacy of world food supply and meagerness of Chinese Government’s foreign exchange holdings even allowing for additional foreign relief grants necessitate an improvement in collection and transportation of surplus food in interior of China for benefit of large cities. To achieve this, Government will attempt to develop constructive programs of transport coordination, production and distribution of incentive goods, and control of wasteful practices in zones of interior which produce food in surplus to their needs.
The above steps constitute a program which is of vital importance to China but which is in present circumstances an ambitious one for Chinese Government to undertake. Hence post-UNRRA relief supplies will be essential to success of this program. Chinese Government on its own part will endeavor to take following steps:
- At national, provincial and municipal government levels, most able and experienced officials available will be selected to take charge of this program and will be given maximum discretion in implementing it.
- Out of estimated 690,000 tons of food which are needed as tentative minimum to insure success of rationing and controlled distribution program previously mentioned, Chinese Government will undertake, in course of 6 months between June and end of November to provide 190,000 tons of rice or wheat from indigenous production and [Page 1311] 200,000 tons of rice or wheat from 1947 foreign allocations made to China. For balance of food needs, it will require not only foreign exchange assistance but also assistance in obtaining rice allocations.
- Efforts will be made by Chinese Government as soon as possible to collect adequate stocks from 1947 crop to maintain after November rationing and distribution systems being inaugurated. But reliable reports have indicated famine conditions in South China (north Kwangsi and Kwangtung, southern Hunan) and drought in North China. It is therefore earnestly hoped that U. S. Government in its continued assistance within scope of post-UNRRA program will see its way to contribute to successful continuation of these schemes after November 1947. Programming of such requirement will be submitted in due time.
- Chinese Government will establish at governmental level organization or measures which are deemed essential for achieving objectives in post-UNRRA relief program. Experience, staff and established facilities of CNRRA will be fully utilized.
- Chinese Government will welcome consultation or requests for additional information with regard to program set forth in this memorandum.” May 30, 1947.
Embassy comment will follow in separate telegrams.32
Sent Department 1184; repeated Shanghai 494.