The status of the transfer, since the lifting of restriction on military
items, of ammunition to the Chinese under the Surplus Property Act is
summarized below:
It appears that the problem now, in the main, is that of transporting the
ammunition to China. The Chinese Government apparently is without the
means to effect early movement of the above tonnage. The Department of
the Army, in order to assist the Chinese Government in moving this
ammunition to China, has neither the authority to participate, nor the
funds required to defray handling and transportation costs.
I trust that the above will serve to clarify the position of the
Department of the Army in this matter.
[Enclosure]
Memorandum by the Director of Plans and
Operations of the Army General Staff (
Wedemeyer
) to the Chief of Staff (
Eisenhower
)
Washington
, 18 February 1948.
Subject: Status of Ammunition for Transfer to the
Chinese Government
Discussion
1. A grand total of 63,326 tons of surplus ammunition has been
earmarked for transfer to the Chinese Government. Of the total, [Page 19] OFLC has completed contracts
with the Chinese Government for 3,864 tons (Inclosure #1)48
The remaining 58,462 tons have been declared surplus by the
Department of the Army to OFLC or is now in the process of
declaration. All of this ammunition is located in Saipan, Tinian,
Hawaii and Okinawa. The removal from its present location and
shipment to China is a responsibility of the Chinese Government.
2. Marianas
-
a.
- An open end surplus sales contract was negotiated by OFLC
in Shanghai and signed by the Chinese Government on 7
January 1948 for ammunition in the Marianas. The initial
transfer under this contract involved 3,374.7 tons of ground
type ammunition and 489.3 tons of aviation type ammunition,
the latter applicable to the 8⅓ Group Program, all of which
is located in Saipan. (Itemized list by type and quantity is
attached as Inclosure #1.) A Chinese ship and labor to
commence removal of this ammunition was scheduled for
arrival at Saipan on 30 January 48. Neither ship nor labor
had arrived at Saipan as of 3 February and no report of
arrival has been received to date.
-
b.
- (1) On 15 January the Department of the Army, by radio to
CinCFE,49 directed that 725 tons of
100 pound bombs be declared surplus. 125 tons of 100 pound
bombs are located in Saipan and 600 tons are located in
Tinian (See Inclosure #2). Declaration forms are now being
prepared by MarBo.50 OFLC will negotiate the
transfer contract upon receipt of the completed declaration
forms. This ammunition is applicable to the 8⅓ Group
Program.
- (2) In addition to the 100 pound bombs, there are 5,850
tons of 250 and 500 pound bombs located in Saipan and 7,225
tons of similar types located in Tinian all of which is also
applicable to the 8⅓ Group Program. Although available for
declaration as surplus on 15 January 1948 with the 100 pound
bombs, declaration of the 250 and 500 pound bombs is being
withheld, at the request of the State Department, until
specifically requested by the Chinese Government. (An
itemized list of this ammunition, by type, quantity and
location is attached as Inclosure #2)
-
c.
- On 3 February 1948, the Department of the Army by radio to
CinCFE, ordered the declaration of an additional 896.41 tons
of artillery ammunition (See Inclosure #3). Upon completion
of the declaration forms, now being processed by MarBo. OFLC
will add this transfer to the open end contract signed on 7
January 1948 and mentioned in paragraphs 2 a above.
3. Hawaii. A total of 16,266 tons of
ammunition in Hawaii is [Page 20]
available for transfer to the Chinese Government (See Inclosure #4).
1,266 tons were declared surplus by Department of the Army radio to
ComGen USArPac51 on 19 January 1948. An additional 15,000 tons
were declared surplus by Department of the Army radio to ComGen
USArPac on 11 February 1948. Declaration forms are being prepared in
Hawaii and will be forwarded to Department of the Army upon
completion. OFLC upon receipt of the declaration forms, and State
Department approval, will negotiate the sales contract in Washington
with representatives of the Chinese Government.
4. Okinawa. CinCFE has notified the Department
of the Army that a quantity of ammunition estimated roughly as
27,500 tons is available in Okinawa. The types, exact quantities and
serviceability are unknown. CinCFE has stated that a 100% inspection
would be necessary before executing declaration forms. Department of
the Army has instructed CinCFE to determine if sale of this
ammunition in bulk is acceptable to OFLC and the Chinese Government.
If answer is affirmative, the 27,500 tons will be declared surplus
by Department of the Army, and OFLC, if State Department then
approves, will negotiate a bulk contract in Shanghai for the entire
amount.
5. Zone of Interior. The Department of the
Army has prepared and delivered to Olin Industries, Inc., a contract
for the exchange of 6.5 million rounds of caliber .50 ammunition
from U. S. Army stocks in return for a quantity of newly
manufactured ammunition. Olin Industries is arranging resale of the
6.5 million rounds to the Chinese Government. The ammunition from U.
S. Army stocks is Armor Piercing, Incendiary and Tracer linked in
ratio 2–2–1, and is packed ready for overseas shipment. Olin
Industries will sign the contract with the Army upon receipt in
writing from the Bureau of Internal Revenue, the exact amount of the
excise tax payable on the ammunition to be manufactured and returned
to the Army. A Chinese representative has indicated willingness to
accept the price which Olin Industries expects to offer to his
government. Olin will complete the separate contract with the
Chinese Purchasing Agent following signature of the contract with
the Army. It is expected that the contracts will be signed on
Tuesday, 17 February 1948. Delivery of the ammunition at U. S. Army
depots to transportation, arranged by Olin for the Chinese, is
expected to commence within 10 days following the signing of the two
contracts.
6. Completion of contracts for transfer of the remaining 58,462 tons
of surplus ammunition may be quickened with the negotiation of a
contract by OFLC for sale of this remainder as bulk. This would
eliminate the necessity of the time consuming preparation of [Page 21] declaration forms which at
present itemize in detail all supplies transferred by each contract.
Further, the negotiation of contracts by OFLC and the transfer dates
of ammunition stocks would be considerably advanced if initially
there is an “open end” contract negotiated for this transfer in bulk
of surplus ammunition. This procedure, if established, would be the
appropriate action of the State Department which is responsible for
the policies governing operations of OFLC.
7. To further expedite the delivery of surplus ammunition to China by
increasing the degree of assistance the Department of the Army has
neither funds nor the appropriate authority.
-
a.
- For the Department of the Army to assist in delivery to
the mainland of China, ammunition already transferred to
Chinese ownership, there would be required, in addition to
an allocation of funds, either legislation or an Executive
Directive giving the necessary authority.
-
b.
- It is considered that the Department of the Army has
authority to transport surplus U. S. military supplies to
any location prior to relinquishing ownership. The delivery
of surplus ammunition to the mainland of China prior to
transferring ownership to the Chinese Government would
require, however,
- (1)
- An allocation of funds to the Department of the
Army for transportation and handling costs,
and
- (2)
- National policy with respect to military aid for
China that would permit the Department of the Army
to transport surplus military supplies to China for
sale to the Chinese Government.
Conclusions
8. In view of the foregoing, it is concluded that:
-
a.
- Contractual negotiations with the Chinese Government can
be expedited by Department of State policy direction to OFLC
permitting transfer of surplus ammunition without prior
lengthy preparation of declaration forms.
-
b.
- The Department of the Army can render assistance in
delivery to the Chinese Mainland, surplus ammunition already
transferred to Chinese ownership, only if:
- (1)
- Given appropriate authority through legislation or
an Executive Directive;
- (2)
- Funds are made available to the Department of the
Army proportional to the degree of assistance to be
rendered.
-
c.
- The Department of the Army can expedite delivery to China,
surplus ammunition not yet transferred to the ownership of
the Chinese Government, provided:
- (1)
- Funds are made available to the Department of the
Army for transportation and handling costs.
- (2)
- The Department of the Army receives a national
policy statement that will permit transporting of
military supplies to China for sale to the Chinese
Government.
-
d.
- In the absence of appropriate funds and authority as
described in paragraphs 8 b and 8 c supra, the movement of surplus
ammunition to China will follow transfer of ownership and
will be entirely in the hands of the Chinese
Government.
Recommendation
9. It is recommended that the attached letter to the Secretary of
State52 be presented to the
Secretary of the Army for signature.
A. C. Wedemeyer
Lt. General,
GSC
