893.50 Recovery/4–1448: Telegram

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

696. Dept studying U. S. policy aspects problem furnishing qualified advisers to ChiGovt (Embtels 630 Apr. 846 and 669 Apr 14) and [Page 514] agrees some advisory assistance necessary in connection aid program. With regard top level advisers for functions involving policy, Dept of opinion that if provided by US they should be limited to small number for highly select fields. Account must be taken not only of limited number competent advisers available, but also significance their proposed fields of action from standpoint objectives aid program and extent to which reasonable prospects exist for implementation recommendations made. Fields of advice and relationship advisers ChiGovt and aid mission should minimize possibility for undesirable involvement USGovt in course developments in China and implied responsibility therefor. This particularly true for certain aspects fiscal policy and operations where fundamental solution cannot be reached under present civil war conditions and where US effort exert pressure control and reduction military expenditures might imply US responsibility for ChiGovt military effort and be exploited to obtain commitment in that regard. This would be contrary to intent Congress as described Deptel 489 Apr 6.47 Dept believes certain basic fiscal and other policy problems, such as above, cannot be solved through technical advice, but that continuous effort can and should be made in direction of improvements by well timed informal pressure at top levels, e. g., by Chief ECA Mission and top Embassy officials.

Assignment U. S. technical personnel as advisers operational level should also be highly selective and primarily for functions directly related implementation aid program, such as reconstruction projects financed by US appropriation and/or Chinese currency account. In exceptional cases, technical personnel might be assigned advise operations indirectly related aid program which involve minimum policy issues, such as certain aspects foreign exchange operations Central Bank. Largest number technical personnel in advisory capacity probably should be provided reconstruction. US technical assistance to ChiGovt agencies responsible for control or operations distribution expendable US aid commodities should be rendered by members aid mission in course performance normal functions observation and reporting and not by US personnel in capacity advisers assigned to ChiGovt agencies concerned.

Dept thinking now is that specific recommendations on types advisers should be deferred until Chief ECA China Mission has had opportunity study question in China and is able determine ChiGovt exact needs and abilities use advisers in terms China Aid Program. In meantime Dept studying best methods correlate provision technical assistance under Smith-Mundt Act (PL 40248) with China Aid Program.

[Page 515]

Embassy requested comment on foregoing and indicate its views re types and numbers technical personnel and advisers most likely aid implementation China Aid Program.

  1. Vol. vii, p. 184.
  2. Ante, p. 73.
  3. Approved January 27, 1948; 62 Stat. 6.