Foreign Relations of the United States, 1948, The Far East: China, Volume VIII

893.24/10–1448

Memorandum of Conversation, by the Chief of the Division of Chinese Affairs (Sprouse)

[Washington,] October 14, 1948.

Subject: Chinese Military Program under the $125 Million Grants

Participants:	Dr. Shao-Hwa Tan, Chinese Minister
	Mr. Butterworth, FE
	Mr. Freeman, CA
	Mr. Sprouse, CA

Dr. Tan called this afternoon by appointment to discuss the abovementioned subject. Explaining that Dr. Wang Shih-chieh, Chinese Foreign Minister, had discussed with the Secretary at Paris²¹ the status of the Chinese military program, Dr. Tan stated that he had been instructed by his Ambassador to call in this connection. He said that the Secretary had promised Dr. Wang that he would look into the matter during his brief trip back to Washington²² and that the arms and ammunition to be purchased by the Chinese for the seven armies and three reorganized divisions in North China would be shipped by U. S. naval vessels free of charge. Dr. Tan said there were two problems in this connection, the price and the transportation by U. S. naval vessels. He then asked if the Secretary had taken up the matter upon his return to Washington.

Mr. Butterworth said that the Secretary had not discussed the matter with him nor had Mr. Lovett indicated that the Secretary discussed the matter with him. Mr. Butterworth went on to point out, however, that the Secretary had not promised that the arms would be shipped by naval vessels free of charge since this was a matter for the National Defense Establishment and referred to a memorandum of conversation between Dr. Wang and the Secretary, dated October 8, in which the Secretary had merely stated that he would look into the matter. Mr. Butterworth then said that he would himself endeavor to ascertain whether the Secretary had taken up the matter and pointed out that the Secretary had been extremely busy during his brief visit and did not have time to go into all the things that he would have wished to take up.

Mr. Butterworth then asked Dr. Tan if he had noted a New York Times despatch within the past few days in which a high Chinese Defense Ministry official was quoted as having said that although the State Department had transferred over $88 million of military aid funds to the Chinese Government since last April, “not a single thing” bought with the funds had yet arrived in China. Mr. Butterworth continued that the Chinese official further stated that he had no idea when the equipment would be forthcoming and that the despatch concluded that it had been learned that the Ministry of Defense did not submit its own final priority list to the U. S. War Department until two weeks ago. Mr. Butterworth pointed out that aside from the questionable propriety of such a statement by a high Chinese official, the report had no basis in fact and requested Dr. Tan to bring this matter to the attention of his Ambassador.

General discussion then followed of Chinese purchases under the $125 million grants, Mr. Butterworth calling Dr. Tan’s attention to the circumstance that the Chinese Embassy had only recently submitted its first request for the transfer of funds to the Department of the Army for the purchase of arms and ammunition. Dr. Tan went into a lengthy explanation of this delay and pointed out that an earlier list of such items submitted by the Chinese Embassy to the Department of the Army had been held up because of the question of price.

Mr. Butterworth concluded the conversation with the statement that he would look into the matter of what the Secretary might have done during his recent brief trip to Washington and let Dr. Tan know the results.

21. The Secretary of State was attending the third session of the United Nations General Assembly at Paris.
22. In a memorandum dated October 8, Harding F. Bancroft, of the United States delegation to the United Nations General Assembly, reported a conversation between Dr. Wang Shih-chieh and the Secretary of State and stated: “Dr. Wang first raised the issue of some difficulties which the Chinese were encountering in getting arms shipments to China. The Secretary said that he would look into this when he was in Washington over the weekend”. (850D.00/10–848)