893.24/12–3047
The Acting Secretary of State to the Secretary of the Army (Royall)
Dear Mr. Secretary: I have received your letter of December 30 indicating that “in view of the indefinite phraseology of existing legislation” the Department of the Army required a statement from the Department of State that action under consideration was in the national interest “so that the Secretary of the Army can make the requisite certifications”. The Department of State’s letter of December 16, as amended, was an effort to assist in a speedy settlement of this matter by indicating that “this Department concurs in the action contemplated by the Department of the Army …” The letter, as amended, read in full as follows:
“With reference to our telephone conversation of yesterday regarding contracts placed or to be placed by the Chinese Government with American manufacturers for the supply of ammunition, I wish to confirm that this Department concurs in the action contemplated by the Department of the Army in turning over, in accordance with existing legislation, to the manufacturers concerned for subsequent replacement, stocks held in Army depots abroad as well as at home. We understand that this, of course, does not apply to the stocks in the Marianas which, as you know, are subject to another arrangement which is in the process of implementation.”
The specific arrangement to which this correspondence referred arose out of a contract which, it is understood, the Chinese Government signed with Olin Industries, Inc., under date of December 8, for some 6,500,000 rounds of .50 ammunition. I can confirm that, provided it would not jeopardize the military security of the United States, it is in the national interest that the arrangement which you discussed with me on the telephone and indicated was both legal and feasible should be concluded forthwith whereby the requisite ammunition would be advanced by the Department of the Army to the American manufacturer who, in return, would replace it from the supplies produced under its contract with the Chinese Government.
We are glad to learn from the telephone conversation referred to above that General MacArthur is prepared to cooperate in this matter.
Sincerely yours,