893.48/6–1247: Telegram

The Ambassador in China (Stuart) to the Secretary of State

1276. Following observations designed to point up some of problems in connection with post-UNRRA relief and suggest possible lines of solution. (ReEmbtel 1275, of June 12, 11 a.m.)

Need for post-UNRRA relief program for China on humanitarian basis is quite apparent. Moreover, as far as over-all American policy towards China is concerned, post-UNRRA relief program is politically most opportune, since some assistance to Central Government is undoubtedly called for, and this is a most convenient method of making it available. This consideration is reinforced by fact that there is considerable non-Communist sentiment in Nationalist areas which would oppose many forms of American aid but which cannot very well oppose this aid. In my opinion, there is everything to be said for giving China the maximum proposed allocation of $60 million if reasonably effective use of it can be made.
At same time in view of this Embassy’s responsibility to Department and Department’s responsibility to the Congress, we cannot afford a repetition of UNRRA-CNRRA pattern of maladministration and misuse. The danger is all the greater in view of the general condition of admittedly low Chinese morale and administrative standards as result of hyper-inflation, and in view of attitude to American aid groups in Nationalist areas mentioned above. To avoid this, the following are needed:
A much tougher basic agreement than UNRRA basic agreement.37
A larger group than is apparently intended in other countries, this group to have specific powers of veto as well as broad consultative and advisory powers. While Embassy would welcome Department’s choosing and sending out member or members from Washington such member not to [be] a man of good will per se but someone with experience of very difficult operations—Embassy will need some latitude in appointment of members of group on spot.
Concentration of program on as few and as simple measures as possible; in my opinion there is everything to be gained from confining program to provision of food and possibly medical anti-epidemic control measures and eliminating virtually all Chinese proposals for what is essentially continuation of certain uncompleted CNRRA projects. While I have emphasized and reemphasized that post-UNRRA relief program is not designed as a vehicle to permit continuance of CNRRA projects and have spoken most frankly to Chinese on political dangers to them of abuse of American post-UNRRA relief assistance, it is clear that it will be necessary to keep on disabusing Chinese on this score and to prevent maladministration or diversion of post-UNRRA relief funds for this purpose.
Concentration of procurement and shipping in hands of U. S. Government agencies. Embassy welcomes arrangement whereby Department Agriculture will handle purchase of food and suggests that should medical supplies be included in program their procurement should also be handled by appropriate U. S. Government agency. At second meeting with China on June 8 reported in Embtel 1275 of June 12, 11 a.m., China wished to know who would handle shipping. I suggest it also be handled by appropriate U. S. Government agency and upon Department’s confirmation of this suggestion Chinese will be so informed.
Chinese major proposal with respect to post-UNRRA relief is to combine food made available by post-UNRRA relief with food to be made available by Central Government or a scheme of controlled distribution and rationing primarily for what are in fact key economic and political groups in major cities. In effect, such a scheme entails payment of wages and allowances to such groups importantly in form of food, i. e., its use as currency. While this scheme has great advantages from American view of serving: (a) to permit continued functioning of major cities as economic organisms; (b) to prevent social unrest therein; (c) to ensure continued support of key groups to Central Government; and (d) to relieve pressure on food-deficient areas in interior; it also has certain disadvantages.
It may be difficult to justify to Congress use of food not only for relief purposes but as rations for key groups.
Fusion of Chinese and our food supplies into one program will make it more difficult to check use of food made available by U. S.
It will be difficult for U. S. to avoid at least implied responsibility both as far as Congress and American public opinion and as far as Chinese opinion are concerned for any failure of over-all Chinese scheme.
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Nevertheless Embassy has been pushing China to adopt some scheme for rationing and controlled distribution of food both because with continued and sustained depreciation of the currency adoption of some such program is in any case inevitable, and because it appears most feasible mechanism for utilization of post-UNRRA relief supplies. At same time I believe the Department should be clearly aware of its disadvantages and of need for taking and backing up strong line with China, who will otherwise tend readily to make agreements on paper and in principle, but to drag their feet in implementation therefore in expectation that we will let matters slide into the UNRRA–CNRRA groove.

Repeated Shanghai 531, June 12, noon.

  1. Signed at Chungking, November 13, 1945, by representatives of UNRRA and China; United Nations Relief and Rehabilitation Administration, UNRRA in China, 1945–1947 (Operational Analysis Papers No. 53, April 1948), p. 365.