893.48/6–2447: Telegram

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

1380. Embassy hopes reconsideration of Department’s tentative conclusions as to nature and extent post-UNRRA aid to Chinese, as set forth in Deptel 738, June 17, is being undertaken in viewpoints raised Embtel 1370, June 21. Following additional comments relevant in Embassy’s view:

Limiting program here to maximum of $30,000,000 would undoubtedly have unfortunate political repercussions. Chinese have been aware all along that Department’s presentation of post-UNRRA plans to Congress was based largely upon unagreed total essential requirements with only China’s $60,000,000 target set at substantially less than was discussed, and that U. S. was proposing to finance 60% of these needs. Reference Depcirtel March 3, repeated Nanking 255. U. S. decision now to reduce that percentage in case of China alone, in face of passage Greek aid bill44 and China’s efforts to develop definite program for more effective utilization of imported foodstuffs and other relief supplies, is bound to be interpreted here as pointed loss of confidence on our part in present Government. Nor is it felt, in view of paragraph 8 Embtel 1275, June 12, and nature of preliminary negotiations to date, that Embassy can abruptly tell Chinese to plan relief program within almost token limitations.
Embassy agrees that Chinese post-UNRRA planning should be based almost exclusively on food and a carefully screened, ample medical program. This has already been repeatedly emphasized to Chinese as being both realistic restriction and proper application to Chinese of Congressional relief mandate. Embassy also welcomes [Page 1320] full support from Department of its conviction that we must assume dominant role here in developing and guiding voluntary agency participation in the post-UNRRA program. Beyond considerations this regard set forth in Embtel 1370, June 21, Department should, however, not lose sight of fact that very little food can be handled by existing voluntary agency facilities in China because (a) these have been restricted to supply distribution of medical items in most cases, (b) cash relief has been used wherever possible rather than foodstuffs, (c) voluntary agencies cannot afford internal transportation costs on any large scale in using imported foodstuffs for direct distribution and relief activities in the interior.
Dwight Edwards, local director of United Service for [to] China, has submitted at Embassy’s request a preliminary estimate of such voluntary agency needs as are assumed available from post-UNRRA program. Subject to further verification of details, to be followed by submission of breakdown by agency and project, Edwards believes approximately U. S. $10,000,000 could be effectively administered by private groups here. Of this, half would be in imported supplies, mostly medical, and half in cash converted to local currency. Latter need emphasizes desirability of some sales at least under controlled distribution in urban centers since U. S. supplies would thereby serve dual purpose of supporting both Government and voluntary agency programs. Embassy finds it difficult to envisage these two efforts being any more closely “correlated”. On contrary, it believes voluntary agencies will resist any plan to link their activities with those of Chinese Government. They need supplies and local currency financing for established activities and projects, but it is doubtful that they would or could entertain any significant expansion in China under present circumstances in connection with direct relief under post-UNRRA program.
Department’s opposition to “sales U. S. supplies in urban areas as means financing distribution relief supplies in interior” not understood here. Chinese obviously submitted plan outlined Embtel 1184, May 31, in order to meet basic conditions our Congressional legislation particularly section 3, paragraphs (e) and (h). Tentative plan for diversion of sales or credit proceeds from controlled distribution and rationing to relief activities in interior, including purchase and distribution of food from surplus areas, seeds, etc., has been pressed by Embassy in accordance Deptel 610, May 22, paragraph 2, as means of increasing effectiveness and public appreciation in China of post-UNRRA aid as well as to insure U. S. participation in relief effort along broadest and most practicable lines. If Department opposed to food sales in China despite evidently urging this procedure in other [Page 1321] countries, or to Embassy’s participation in determining use these proceeds, Embassy has been acting on two basic misunderstandings and would like to be explicitly corrected.
In addition to comment already made in Embtel 1370, June 21, as to Department’s opinion that U. S. program will probably not result in substantial increased supplies, believe serious floods in Canton area and probable loss to North China of all food availabilities from Manchuria, must be given due weight as basis for increasing allotments of food for China, especially in view of fact that existing international allocations are far below normal average of Chinese imports. Effect on over-all supply position of both developments China was being followed closely. Embassy believes that to extent increased needs are justified, U. S. Government should take more than sympathetic interest in helping to meet them.
[Here follows paragraph 6, a discussion of staff recruitment.]
Embassy definitely of opinion that it is not “thinking along same lines as Department” on two major points as follows: Embassy believes post-UNRRA funds should be made available for China at least to extent requirements of other countries being met and preferably to meet full $60,000,000 target. Embassy also believes that China’s controlled distribution and rationing plan deserves our conditional support with understanding that we will make nature of this support fully clear in official negotiations and public pronouncements, and that we will withdraw if reasonably satisfactory implementation of basic objectives of this program are not being achieved. Clarification of Department’s position on these two issues now highly important.

Sent Department; repeated Shanghai 573.

  1. Approved May 22, 1947; 61 Stat. 103. Turkey also was granted aid under this Act.