893.50 Recovery/12–448: Telegram

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

2414. We cannot agree with basic recommendation Toeca 499, November 26, in which Lapham recommends to Hoffman that in event [Page 663] Communist or Communist-dominated coalition government takes over control most of China ECA should complete present commodity program subject to certain minimum conditions. This would prospectively involve supply of food, fertilizer, cotton and petroleum products until April 3, 1949, in areas under dominant control of Communists who have publicly stated that US, by its assistance to the present Government, has committed acts of hostility to the people of China. To assist by such gifts, the Communists to tide over the critical early days of take-over seems clearly contrary to our interest. We agree that ECA commodities already landed, in process of unloading or aboard ships in harbor, should be turned over to local authorities for distribution under best conditions extractable at the time. We certainly agree that to attempt to reclaim ECA commodities already in Chinese hands would be thoroughly impracticable.

As we have said before, we believe the sound policy, in event of extension of Communist control or take-over of Nanking Government by Communists or Communist-controlled coalition would be immediate announcement in Washington of suspension all further ECA aid in such areas pending re-examination of entire situation.

Reference paragraph 11 of reftel, Embassy strongly opposes any effort to modify bilateral with present Government in direction suggested.

Unless China aid is, contrary to our understanding, exclusively humanitarian in purpose, we can see no basis for donating commodities, including such valuable ones as oil, to those who have publicly denounced our aid program as “an act of hostility against the Chinese nation and the people of China.”