The Ambassador in China (Stuart) to the Secretary of State
[Received June 21—8:28 a.m.]
1370. There are two major points raised in Deptel 738, June 17, 8 p.m., which call for immediate comment and clarification:
- Reduction of amount to approximately $30,000,000;
- Statement that “Chinese officials should be informed that U. S. program will probably not result in substantial increased supplies of commodities under international allocation.”
Both of these tentative decisions seem to be inconsistent with third paragraph of Deptel 736, June 17, 9 p.m.42 If it is in our interest to do something to arrest course of developments in China and if one of the main difficulties is finding practicable means of doing so, then it would seem to follow that full advantage be taken of one of the few unobstructed avenues open to us (see paragraph numbered 1, Embtel 1276, June 12, noon).
As regards (2) above, net effect of Department’s proposal would not be to increase supplies of needed rice and wheat available to China, but merely to provide foreign exchange for a small part of China’s requirements which the Chinese are ready to buy with their own foreign exchange. At the same time it would divert to no doubt worthy but nonetheless eleemosynary activities some food which [Page 1319] Chinese could use to achieve greater political stability and ipso facto create unnecessarily resentment on part of Chinese who would rightly take exception to the attaching of conditions without net gain in food for them.
An early indication Department’s final decision would be appreciated.
Detailed comments on other points in reference telegram will follow.43