893.20/9–1448
Memorandum by the Director of the Office of Far Eastern Affairs (Butterworth) to the Secretary of State
Attached is a list19 of Chinese requests under the $125 Million Grants which have been approved by the Department and paid by the Treasury as of September 14, 1948. As of that date, a total of $47,792,449.94 has been approved and paid in accordance with Chinese requests.
Upon the receipt of a substantiating request from the Navy Department on August 16, a Chinese request for $2 million of the $9.5 million allocated for naval supplies was immediately approved by the Department and paid by the Treasury Department into a Naval Working Fund. On August 24, $4.3 million was similarly transferred to the Navy Department.
On September 9, a Chinese request that $25 million be paid to the Department of the Army for the procurement of motor vehicle parts, vehicle and weapon tires, and demolition explosives, was received and approved by the Department and was paid by the Treasury Department the following day. Delay in the transfer of funds to the Department of the Army has been due to lengthy discussions between that Department and the Chinese regarding matériel desired and available for transfer. An additional $3 million has been transferred to the Chinese for the purchase of petroleum products.
To date the Department has approved requests for some $12 million of the $28 million allocated by the Chinese for Air Force equipment, [Page 174] contracts for which were signed, for the most part, with private companies. In general, this money has been committed for aircraft, aviation gasoline, spare parts, and reimbursements to the Chinese for payments made to OFLC under old contracts. The U. S. Air Force is reviewing Chinese Air Force contracts with the intention of assisting in the administration of details in certain instances but indicates that it may take some time to implement a program for the remainder of the Air Force allocation.
As the attached breakdown indicates, Chinese requests have been examined and approved by the Department and payments have been made by the Treasury Department usually within two or three days after receipt of the requests.
- Not printed.↩