The Acting Secretary of State to the Ambassador in the Soviet Union (Smith)66
773. Moskco 40. Following info and views are offered in connection with Nanking’s 698:[Page 815]
Chinese Emb official last week made renewed inquiries re 130 million rounds 7.92 ammunition, now stored in depots in US, which Chinese Govt wishes purchase provided export license can be obtained. You will recall currently approved policy is to withhold export licenses for munition shipments to China.
We continue to believe that a clear-cut and enduring solution of China’s internal difficulties by military action is not in the realm of practical achievement and therefore that encouragement to Chiang to continue attempts at all-out military solution by furnishing him with unconditional or extensive military support would be unrealistic. We must nevertheless consider possibility that complete withholding of ammunition might impair defensive effectiveness of Chinese Army.
With foregoing considerations in mind we suggest as feasible and politically expedient in light of current developments an exception in the case of 7.92 ammunition which, as you know, is not suited to our needs or to possible use elsewhere except China. Procedure would be to have material declared surplus after which FLC would enter into a contract for cash sale to Chinese, Chinese Emb having been advised in advance that export license would be granted.
Also, because Brit and Canadians have at our suggestion adopted negative attitude re munition shipments to China, it would be only proper to let them know informally of exception we are making.
Attached to this telegram was a memorandum by the Director of the Office of Far Eastern Affairs (Vincent) to the Under Secretary of State (Acheson) dated April 2, 1947, as follows: “This telegram is the result of some wrestling I have been doing with my soul in recent weeks, Nanking’s reference telegram is simply the gong.
“In submitting it, I have the feeling I am running a slow motion reverse showing of the conversion of St. Paul.
“I have discussed the matter with General Hilldring, because of his Chairmanship of the Policy Committee on Arms, and he agrees with my views.”↩