893.50 Recovery/8–449: Telegram
The Consul General at Taipei (Macdonald) to the Secretary of State
[Received August 5—11:54 p. m.]
353. K. C. Wu, in discussing means of maintaining stable economy for Taiwan, suggested that 50 million dollars of ECA China money not yet used be allotted Taiwan as follows: 30 million for fertilizers and 10 million each for power and transportation. He claims this would insure economic stability for coming year during which time plans and trade agreements could be worked out so that Taiwan would be able stand on own feet. He is enthusiastic about his scheme and has [Page 373] written to Secretary State’s brother97 regarding it with request he approach Secretary Acheson.
Wu’s figures respect Taiwan requirement for fertilizer much too high and, according Craig, ECA 5 million would be sufficient. Transportation and power figures also excessive.
In considering any aid for Taiwan it must be remembered that too much financial assistance can be as bad or worse than none in creating inflation. I would not take Wu’s plan too seriously. It is extravagant and fails to provide means whereby Taiwan might share some of the costs. Airgram follows.98
Sent Department 353; repeated Canton 160.