893.50/1–2848
Memorandum of Conversation, by the Secretary of State26
| Participants: | Dr. V. K. Wellington Koo, Chinese Ambassador |
| Mr. Tsu-yi Pei, Head of Chinese Technical Economic Mission to the United States | |
| The Secretary | |
| Mr. W. Walton Butterworth, FE |
The Chinese Ambassador accompanied Mr. Tsu-yi Pei, the Head of the Technical Economic Mission to the United States, to call upon me. Mr. Pei brought the usual greetings from the Generalissimo27 and Madame Chiang, General Chang Chun,28 Mr. Wang Shih-chieh29 and others. I asked Mr. Pei a number of questions regarding other Chinese personalities and regarding conditions in Nationalist-held territory.
Only three statements worthy of record were made by Mr. Pei or Dr. Koo. The former stressed the urgency of China’s needs, indicating that dollar assets had rapidly declined since June and were now nearing $150,000,000. Secondly, he asked whether a 100–million-dollar credit could be given the Chinese Government to take care of further arms purchases. In this connection he expressed appreciation for the actions of the United States Government in making available equipment and ammunition surplus to the U. S. Army’s needs at very moderate prices. He pointed out that repair and transportation charges were very heavy. In reply, I stated that his request would [Page 8] be given consideration. Dr. Koo referred to the arrangements with Olin Industries, stressing the urgency of China’s need for .50 caliber ammunition. He stated that the present delay was being occasioned by the non-conclusion of the contractual arrangement between Olin Industries and the Army and asked whether I could intervene to accelerate action. I requested Mr. Butterworth to take the matter up with the Department of the Army to see what could be done to expedite action.
[The following was added by Mr. Butterworth:]
I got in touch with General Timberman, P & O, Department of the Army, and recounted to him the Chinese Ambassador’s statement and the Secretary’s request. General Timberman later called me back to say that certain legal difficulties had arisen due to differences in the cost of the Army’s ammunition and that being manufactured under the contract with the Chinese Government, that an attempt was being made to solve these difficulties and that a representative of Olin Industries was coming to Washington next week to discuss the situation. General Timberman agreed to keep me informed of developments. W. W. B.