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

893.50 Recovery/5–348: Telegram

The Secretary of State to the Ambassador in China (Stuart)

Washington, May 3, 1948—6 p.m.

663. Before leaving for China James Yen had meeting with Hoffman, followed by detailed discussions with ECA and Dept. Although Yen started with apparent assumption that one-tenth of $338 million would be allocated in foreign exchange to expand the Mass Education Movement, it was made clear that thinking here encompassed rural reconstruction program which would include Mass Education approach but also implementation recommendations Sino-American Agricultural Mission and some special attention to small rural industries. It was explained that 10 percent provision was a ceiling, and could be spent either in local currency or foreign exchange, probably mostly in local currency. Upon departure Yen received letter from Hoffman emphasizing need for careful preparation of realistic program, and for clear distinction between expenditures to be made in foreign exchange and those in local currency.

Within this framework, Yen appeared inclined to recommend expansion and development of Mass Education Movement’s program along two lines: (a) extensive program of literacy teaching, including some rudimentary work in fields of preventive public health and cooperatives for marketing, credit and purchasing; and (b) special intensive program in two or three areas, linking up education, livelihood, health and self-government along lines indicated by past experimentation Mass Education Movement. One of these intensive areas would presumably be Szechwan District in which Movement now operates.

Now developing draft of special bilateral agreement covering Rural Reconstruction Commission.¹⁶ In this connection we would appreciate views Embassy and ConGen on relationship this Commission to Central Government, bearing in mind that law provides Commission must operate under direction and control of Administrator.

When this draft is completed Dept will send it to Embassy¹⁷ with instructions covering negotiation of this special bilateral agreement in Nanking. Consideration being given to possibility sending Moyer¹⁸ assist in negotiations and to discuss with concerned agencies development of realistic programs.

Sent Nanking as 663, repeated Shanghai as 803.

Marshall

16. For correspondence on negotiation of this agreement, see pp. 601 ff.
17. See Department’s telegram No. 810, May 28, 7 p.m., p. 601.
18. Raymond T. Moyer, of the Department of Agriculture.