893.50 Recovery/5–1148
Memorandum of Conversation, by the Assistant Chief of the Division of Chinese Affairs (Sprouse)
| Participants: | Tan Shao-hwa, Chinese Minister |
| Mr. Ringwalt, CA24 | |
| Mr. Sprouse, CA |
Minister Tan called at the Department by appointment today to make certain inquiries regarding the $125 million grant under the China Aid Program. He explained that Ambassador Koo25 had suggested to him and to Dr. Lee Kan, acting head of the Chinese Technical Mission, that they approach their friends at the Department of State in this regard. Minister Tan stated that the Chinese Government planned to use the entire amount for expenditures of a military character, with some of it going to the Chinese Army for purchases of munitions, some to the Chinese Air Force and a small amount for the Chinese Navy. He further stated that the Chinese Embassy has just received word that plans for the expenditure of this grant would be forwarded to it from Nanking within a short time. Minister Tan said that a General Yang, Chief of Ordnance, was expected to arrive in Washington in the near future to take the necessary action to acquire military equipment for the Army and that General Mow26 would act similarly for the Chinese Air Force. When asked what orders had been placed for the purchase of munitions from commercial sources in the United States, the Minister said that, while the Embassy had recommended such action to the Chinese Government, no steps had as yet been taken to that end. He pointed out that the [Page 75] most urgent need was for .30 caliber rifle ammunition which the U.S. Army had recently indicated was not available from surplus stocks.
Mr. Ringwalt explained that he had recently made a second request of the Department of the Army to ascertain whether such ammunition might not be available for transfer to the Chinese Government.
Minister Tan then expressed an interest in knowing what procedures would be followed in making this $125 million grant available to the Chinese Government for its purchases.
Mr. Sprouse replied that this was a matter for approval by the President and that work was being done in this regard and should be completed this week. He added that the terms decided upon by the President would be promptly communicated to the Chinese Embassy.
Minister Tan made an oblique reference to the possibility that for “diplomatic reasons” the Department might wish “to close one eye” to Chinese purchases of military equipment. Mr. Sprouse rejoined that, in his personal opinion, the Congress would be interested in knowing how this grant was spent even though it had been indicated that the Chinese Government was to use it for whatever purpose it might decide upon. The conversation then turned to other subjects unrelated to the China Aid Program.