893.50 Recovery/4–648: Telegram

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

489. Senate Foreign Relations Committee Report16 and Senate debate on China Aid Act17 indicated clearly $125,000,000 grant to be used by Chi Govt “on its own option and responsibility” for whatever purpose “decided upon by the Chi Govt”. Sen Vandenberg stated in debate Mar 29 [30]:18 “This process must be completely clear of any implication that we are underwriting the military campaign of the Nationalist Govt”. Sen Connally stated:19 “It is in the nature of an outright grant to China for her own use, under her own responsibility, for whatever great and critical need may arise. There is not a word in the bill regarding military supplies or military aid. This measure is the best plan or device we could bring about in the Committee to extend aid to China, without making hard and fast commitments which we did not feel it was wise to make”. (Deptel 483 Apr 320)

Committee Report states this grant is to be subject to “the administrative terms which the President deems appropriate”, that grant is to be used by Chi Govt “without any of the conditions and controls which will prevail with respect to the expenditure” of the $338,000,000 and that Committee does not intend that “Administrator of the Economic Cooperation Act21 should be held responsible for this part of the bill”. Legislative history indicates that phrase in the act “on such terms as the President may determine” refers to procedural and financial terms and not to screening of requirements or supervision of end use.

It should be noted that China Aid Act as passed reduces by the amount of this grant the amount for essential commodity imports under program to be administered by ECA.

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China Aid Act does not require U. S. military aid mission to China since in final action Greek pattern22 was not adopted for China. Executive Session hearings Senate Foreign Relations Committee indicated clearly Committee’s desire to avoid placing China in same category as Greece in respect to military aid. AAG23 will not, therefore, be expected to administer military assistance program under the act. Rptd Shanghai as 597.

  1. No. 1026, Aid to China, Senate Foreign Relations Committee, March 25, 1948 (Washington, Government Printing Office, 1948).
  2. Title IV of the Foreign Assistance Act of 1948, approved April 3, 1948; 62 Stat. 137, 158.
  3. Congressional Record, 80th Cong., 2d Sess., p. 3668.
  4. Ibid., p. 3693.
  5. Post, p. 485.
  6. Title I of the Foreign Assistance Act of 1948.
  7. Title III of the Foreign Assistance Act of 1948; for United States–Greek Relief Agreement, signed July 8, 1947, see Department of State.Bulletin, July 20, 1947, p. 139.
  8. Army Advisory Group.