893.50 Recovery/12–1848

Memorandum by the Director of the Office of Far Eastern Affairs (Butterworth) to the Acting Secretary of State

Apropos of our conversation this morning in regard to the status of the China Aid Program in areas which may be occupied by the Chinese [Page 666] Communists, I recommend that you submit this problem to the Cabinet at its next meeting with a view to obtaining a decision along the following lines:

The China Aid Program should not be continued in areas occupied by the Chinese Communists except under the circumstances set forth hereunder:

In the event of Chinese Communist occupation of a city where ECA is engaged in implementing the China Aid Program, ECA representatives should continue the distribution, under procedures similar to those now in force, of commodities already landed and commodities in the process of being unloaded from ships at that city or at the port of entry for that city. ECA should withdraw its representatives from such a city at the conclusion of the distribution of these commodities. Vessels carrying ECA commodities destined for a Chinese city which falls into Chinese Communist hands should be diverted to National Government-held areas or to some non-China destination, as directed by ECA.