800.48 FRP/8–247: Telegram

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

985. Par 47. Points mentioned Par 4 (Embtel 1641 Aug 2) all agreed by Dept. Should be pointed out in connection with Item c, Para 6 that under terms Relief Act local proceeds may be used only for relief and work relief. Work relief can of course include payment of wages on work projects which accomplish rehabilitation purposes. However Senate Committee seemed intent on restricting authorization either to direct relief or to payment of wages in lieu of direct relief. In view legislative history Dept desires to be consulted as plans are developed re categories of work relief projects. Sent Nanking as Depts 985, repeated Shanghai as 1333.

Following comments re points raised Par 5 (Emtel 1642 Aug 2):

Dept glad authorize Emb to recruit personnel relief mission but desires approve adviser and two assistant advisers. Under Relief Act all members must of course be Amer citizens and investigated by FBI58 and subject to such regular FonServ59 personnel check as to qualifications for their positions in FonServ Reserve. Meantime Dept also collecting names and qualifications candidates in order expedite recruitment. Will clear with Emb before any appointments made. Relief adviser cannot be chosen from UNRRA staff. Sentiment in Appropriation Committees even stronger than Foreign Affairs Com[mittees] against use UNRRA personnel in key positions. Dept realizes that number these persons have extensive experience and excellent qualifications for assisting in US program and can agree that 2 or 3 such persons be employed. Dept has no info [that] Ritchie Davis60 unavailable. Expect communicate with him and advise Emb if he will accept.
USFRP61 presented to Congress primarily to take care needs calendar year 1947. Depts representatives indicated to Congressional committees that bulk of supplies would be shipped by end this year although expected some shipments may slip over into first part 1948. Emb therefore should plan program for shipments from U. S. in 1947 although recognizing some slipovers may occur as result failure to achieve complete procurement of all allocations during this period. If necessary distribution of supplies arriving in Jan or Feb could be [Page 1334] retarded to some extent. Re local currency, Public Law 84 specifies that Congress must approve disposition unencumbered local currency funds remaining on June 30, 1948.
Subsequent to signing relief agreement no objection Central Bank making advances to be repaid from proceeds sales.
Dept raises question whether relief advisory mission would be in position to assume responsibilities of unloading, warehousing and primary distribution which would normally result from retention of custody of supplies at ports of entry. It may therefore be necessary transfer supplies [to] Chinese at U. S. ports. Possibly your objectives can be accomplished through your advice on shipments from U. S. and by reason your power of control over supplies within recipient country as required by Public Law 84 and proposed relief agreement. Further believe transfer at U. S. ports result in administrative advantages both here and in China. Dept not prepared insist transfer at U. S. ports if Emb believes this procedure would prevent achieving objectives. Further comments requested.
  • (1) Proposed maximum wheat and flour allocation likely from U. S. in Sept–Dec period is 100,000 long tons wheat equivalent of which no more than half would be in wheat.
  • (2) See no objection to channelling of USFRP flour through normal channels upon arrival in China under certain conditions based upon controlled distribution plan objectives. Flour will be bought by Dept Agric here and shipping arrangements made by it to port destination in China.

  1. Federal Bureau of Investigation.
  2. Foreign Service.
  3. Formerly Associate Legal Counsel, UNRRA Shanghai Office.
  4. United States Foreign Relief Program.