Memorandum by the Director of the Office of Far Eastern Affairs (Vincent) to the Secretary of State

The following is a rough estimate supplied by Major Naylor of the War Department of the present status of the 8⅓ Group Program for China:

Over-all program involves $141,000,000
Already transferred under Lend-Lease and surplus arrangements 30,000,000
Balance remaining to be transferred $111,000.000

Of the undelivered balance, some $54,000,000 is stockpiled in the United States and in the Pacific and the balance, approximately [Page 799] $57,000,000, is unavailable in Army stockpiles. Of the available $54,000,000, approximately half represents civilian end-use items, of which about 50% involves spare parts for planes already transferred to the Chinese Government.

The Army, of course, is very anxious to dispose of the civilian end-use portions in order to rid itself of the responsibility for their maintenance. Apparently, however, FLC35 is awaiting a “green light” before negotiating for their sale to the Chinese Government. Officers in the War Department express the opinion that the Chinese Government would be glad to get these items on reasonable terms and I therefore recommend that FLC be directed to proceed at once with negotiations.36

J[ohn] C[arter] V[incent]
  1. Foreign Liquidation Commission.
  2. Attached is a note dated February 27 seating that the Secretary had approved “your recommendation regarding the disposal to the Chinese of civilian end-use items”.