893.00/12–2247: Telegram
The Ambassador in China (Stuart) to the Secretary of State
[Received 2:45 p.m.]
2437. Having taken the plunge in requesting American aid (mytel 2271, November 21, noon) the Chinese leaders responsible therefor, namely, the Generalissimo, the Prime Minister, and the Foreign Minister, but I believe principally the latter, are becoming preoccupied with the criticism of their action to which they will be subjected by reactionary elements. As indicative of the trend of their worries, I quote below a memorandum handed to me by the Generalissimo’s secretary entitled “Some Fundamental Considerations on American Aid to China.” Some of the ideas outlined may be considered in the Department as startling and as a retrogressive step. I do not believe such interpretation is warranted. These leaders, but principally Wang Shih-chieh, who is unusually sensitive to the reactionary criticism, merely wished, I believe, to let us know something of their thinking on the content of any American aid to China program. In this connection it would be most helpful to be given, as requested in mytel 2381, December 12, 1 p.m., information regarding reception of Chinese Government démarche in Washington.
Memorandum follows.
- “1. The American plan for aid to China should be a long-range 4-year project, the purpose of which would be to assist China to achieve political and economic stability, including currency reform. To attain this object, the funds for relief and rehabilitation to be obtained from the U. S. would require 500 million U. S. dollars for the first year, the same amount for second year, 300 million U. S. [Page 1238] dollars for third year, and 200 million U. S. dollars for fourth year, totalling 1½ billion U. S. dollars.
- “2. With regard to the relief fund obtained under the plan, the Chinese Government should appropriate a fund in Chinese currency, equivalent to the value of relief commodities supplied by the U. S. This fund should be put to such uses as to benefit production and to curb inflation. There should be consultation and agreement between China and U. S. in mapping out schemes for spending of this fund; and the American Government should receive full information concerning its actual disbursement.
- “3. China will, on her accord, employ experienced American personnel to assist her in the planning for financial, monetary, and other administrative reforms. She will likewise employ American technical experts to participate in the execution of certain construction undertakings. The Chinese Government itself will express the aforesaid intention to the American Government at an appropriate moment, with request that the latter will assist in the selection of such personnel. The employment of these personnel will not however, be made an international legal obligation of the Chinese Government in order to avert infringement on China’s sovereignty and administrative integrity.
- “4. The American aid to China plan shall contain no political condition other than what may be stipulated in the aid plan for Europe. On the other hand, terms which will be stipulated in the aid plan for Europe may apply, wherever practicable, to China.
- “5. As regards the supply of military equipments and ammunitions, China should be allowed to purchase in the form of loans the surplus and other military material from the American Government. The total of such loans is tentatively estimated at 100 million U. S. dollars for the year 1948. Prior to the submission of lists for such purchases, the Chinese Government will consult the American Military Advisory Group in China.”