800.48 FRP/7–2247: Telegram

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

904. Rap 18. Following are proposals for Ur review for US Foreign Relief Program to China following discussions with Butterworth:

Approximate target $30 million for China was determined for following reasons. It was recognized in discussions with Congress that on strictly comparable basis with European countries there was no real deficit in balance payments that could not be met out of China’s own resources. The $60 million figure initially considered as a relief [Page 1327] goal was estimated by taking Chinese food requirements during 1947 as a guide to need. Total relief authorization of $350 million covers only about one-half of the deficits in all countries mentioned in Relief Act. Therefore $30 million was then considered to be fair share to China.
Approaching problem from supply position, we have explored possibilities of allocation of rice from Southeast Asia, South America, and rice and other grains from US during period in which program will operate—shipments July through Dec 1947. Maximum current or prospective allocations are as follows: Siam 15,000 tons; Burma 7,000 tons; Ecuador 10,000 tons (these are quantities still remaining to be picked up from 1947 rice allocations for China); from US 43,000 tons of rice for Oct–Dec shipment and maximum possible allocations of wheat or flour 100,000 tons for Sept–Dec shipment. Value of these items would be about $30 million. If to this were added $3 or $4 million in medicines, etc., total is only slightly higher than target of $30 million contribution to China. For Ur info, 6 percent ($21 million) limitation on procurement outside US for total relief program does not apply pro rata by countries. In view of other urgent requirement for procurement outside US only about $5 million can be used for rice procurement in Southeast Asia and South America.
For Ur info, should be noted if 100,000 tons allocation other grains from US is made it would represent supplies in excess of current or present prospective allocations which have recently been at rate of only 12,000 tons per month. It is not at all clear that allocation of 100,000 tons can be made from US.
Program now proposed as follows:
A major proportion of cereals for delivery to proposed controlled distribution and rationing system.
Medical supplies up to $3 or $4 million, special foods probably $1 million or $2 million, and if desirable small amounts of rice and flour to be given volunteer agencies for their distribution.
Limited direct supplies for 2 or 3 restricted and accessible famine areas where effectiveness of small program could be shown. This would be coordinated with volunteer agency program. Dept especially interested in this possibility for as much as feasible although recognizes limitations on control and transportation.
$CN49 from receipts of supplies sold under 1) above to be turned over to volunteer agencies in part and supplementing direct famine area supply programs and also for internal transportation costs in so far as Chinese Govt cannot be prevailed upon to assume, With respect to matter of internal transportation following is an excerpt from report of House Appropriations Committee:50 “It is [Page 1328] the most earnest desire of the committee that in administering this account the State Dept will require the govts of any recipient country to make specific detailed and itemized recommendations for such assistance as the State Dept may desire, including a statement of the necessity for such assistance, and that, insofar as it may be done, agreements will be made with the recipients that they shall make contributions to the cost of the assistance provided, such contribution to be in addition to the amounts that this country shall furnish and insofar as it is possible to do so that waterborne transportation of supplies to such countries and the distribution therein be provided to the fullest possible extent by the recipient countries.”

Dept willing to authorize distribution of supplies under controlled system since this shows some promise of achieving more equitable distribution than under present conditions and in present circumstances appears to be most feasible avenue of approach. However, Dept shares Emb apprehension re controlled distribution plan both as regards ability Chinese to administer such a program and ease with which it could in fact be used to favor certain groups which government for political reasons desired to favor. It hopes that all possible steps will be taken to avoid our being maneuvered into position of sharing responsibility and public criticism if plan fails on account of these points both of which would involve violations of Provisions of Sec. 3 in relief authorization act. “We also desire avoid becoming subject to pressure by Chinese to continue assistance beyond the relief program in order to prevent collapse of distribution plan early in 1948. Dept feels, therefore, that every possible precaution should be taken before final commitment to Chinese to see that scheme is developed in most feasible manner and that limit of our responsibility is clearly understood.

Believe above proposed program is essentially in accordance with July 5 Gilpatric memo51 to Butterworth. Ur evaluations of above proposals and Ur positive and detailed recommendations urgently requested. Sent Nanking as Depts 904 repeated Shanghai as Depts 1208.

  1. Chinese National currency.
  2. Report No. 990, Supplemental Appropriation Bill, 1948, July 18, 1947, 80th Cong., 1st sess., p. 6.
  3. Not printed.