893.50 Recovery/1–2648

Memorandum by Mr. Robert N. Magill, of the Division of Chinese Affairs 38

The Chinese Technical Mission, headed by Pei Tsu-yi, met on January 21 in Mr. Havlik’s office. The discussion dealt mostly with technical points of information. However, Pei indicated a strong desire to know the general outlines of the Program and urged that examination of technical points not be allowed to hold up presentation of the Program. He offered to give the views of the Chinese Government, and did so along the following line:

The Chinese Government desires a four-year program amounting to $1.5 billion, broken down as follows: first year, $500 million; second year, $500 million; third year, $300 million; fourth year, $200 million.39 He said that if authorization of the program should be delayed, the Chinese Government would hope that $60 million authorized under [Page 462] PL 389 could be appropriated for the first quarter of 1948. He indicated that the billion and a half figure would take care, of relief and rehabilitation, and that attention would have to be given simultaneously to currency reform and military needs. Pei said that, as a banker, he himself was inclined to approach the problem of currency reform cautiously. He emphasized that any balance of payments calculation should take account of military imports and volunteered the figure of $100 million for this purpose during 1948. He offered to make available a breakdown of this military figure, and it was my impression that this estimate was the firmest of the figures that he gave. Mr. Havlik, however, responded that he was interested only in the general magnitudes envisaged by the Chinese Government and did not encourage any further refinement of the military figure.

  1. Marginal notation: “This was returned from S/S [the Executive Secretariat] 2/4 with no initials”.
  2. A formal aid program was prepared by the Chinese Technical Mission on January 27. In a memorandum of February 17 to Messrs. Butterworth and Ringwalt (893.50 Recovery/2–1748), Mr. Magill indicated the program had been submitted to the Department “a number of days ago.” It proposed economic assistance totalling $1,500,000,000 over a 4-year period, of which $973,900,000 was to cover the 18 months through June 1949; and military assistance estimated at $100,000,000 for the first year with amounts for subsequent years to be determined on the basis of military developments.