893.50 Recovery/6–2848

The Chairman of the Senate Committee on Appropriations (Bridges) to the Secretary of State

My Dear Mr. Secretary: Because of the urgent need of the Chinese Government for military supplies and economic aid, and the vital interest of the American people in the maintenance of Chinese independence, the Congress of the United States, on April 3, 1948, authorized and directed the Reconstruction Finance Corporation to advance $50,000,000 for the purposes of the China Aid Act.

From April 3, 1948 to the present day, the Department of State has failed to use any portion of this sum for the purchase of military supplies by the Chinese Government. There has been a general laxness throughout Government in freeing the advances for China aid to be used by the Chinese Government. Although the advance of the Reconstruction Finance Corporation for European recovery was made available in April, the funds for China military aid, which were provided in the same legislation, were not released until the middle of June. Moreover, none of this money has been expended to aid China since its expenditure was authorized.

The facts are as follows:

The China Aid Act passed by the Congress on April 3, 1948, authorized, in Section 404(b), appropriation of a sum not to exceed $125,000,000 for additional (military) aid to China through grants β€œon such terms as the President may determine and without regard to the provisions of the Economic Cooperation Act of 1948.”

In Section 406 of the same act the Reconstruction Finance Corporation was authorized and directed to make advances, not to exceed in the aggregate $50,000,000 to carry out the provisions of the China Aid Act of 1948, in such manner and in such amounts as the President shall determine.

This sum of $50,000,000 was intended to cover advances upon the economic and military aid, pending an appropriation by Congress. On April 5, 1948, officials of the State Department informed Chinese officials that of this sum $36,500,000 would be for the economic aid program and $13,500,000 for the special (military) aid.

Since April 5, 1948, the Chinese Government has repeatedly attempted to obtain from the Department of State a statement of the necessary procedure for utilizing the $13,500,000, as well as the total sum of $125,000,000. No reply has yet been given by the Department of State, in spite of the fact that on June 10th at the open hearing of the Senate Appropriations Committee, the Assistant Secretary of State, Mr. Thorp, presented to the Committee a letter dated June 2, 1948, outlining the procedure for the utilization of the special aid fund. (A copy of the letter of the President is attached hereto.)

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Because the Department of State and other agencies of the Government have delayed in making these funds available for expenditure, the Chinese Government for nearly three months has been prevented from utilizing the military aid authorized by the Congress on April 3.

In view of the extremely serious military situation in China, where Chinese Government armies with insufficient supplies are being attacked by more than 2,000,000 well-armed Communists, the delay of the Department of State in this matter is clearly contrary to the vital interests of the American people.

It is my desire that you furnish to the Senate Committee on Appropriations a full explanation of the slow action by the Department of State in this very urgent situation. The Committee would like assurance, also, that immediate action will be taken to carry out the wishes of Congress that were expressed in the enactment of Public Law 472 last April.

Sincerely yours,

Styles Bridges