Office of the Historian

893.24/10–2149

Memorandum by the Assistant Secretary of State for Far Eastern Affairs (Butterworth) to the Secretary of State

[Washington,] October 21, 1949.

Discussion

It is my understanding that the President has decided not to delegate to other authority for the use of the $75,000,000 fund authorized under Section 303 of the Mutual Defense Assistance Act of 1949, but that he will entertain recommendations respecting its use. I believe that the question of the use of all or part of that fund for overt military assistance to the Chinese Government or remnants of the Chinese Government should be met squarely without delay. The steady deterioration of the military position of the Chinese Government, the urgent pleas of that government for assistance, and the fact that funds have now become available for use within the discretion of the President for that purpose argue strongly for a prompt decision.

The following basic assumptions are, it is believed, fully supported by information available to the Department respecting the situation in China and are pertinent to consideration of the question of further military assistance to the Chinese Government.

1.
The phase of organized large-scale military resistance to the Chinese Communists has passed or is rapidly passing and a period of massive political defection is taking its place. As a matter of fact General Barr reported to the National Military Establishment as early as November 1948, even before the Chinese Government had suffered staggering military reverses at Peiping, Tientsin and Hsuchow and before the Communist armies had moved in force across the Yangtze overrunning most of southeastern China, that he was [Page 569] convinced “that the military situation has deteriorated to the point where only active participation of US troops could effect a remedy” and that he believed that “Communist forces will overwhelm the Government wherever it locates itself.” These views have been confirmed by the march of events. Furthermore, other military appraisals including that of Joint Chiefs of Staff respecting the military aspects of the Chinese Government’s proposed aid programs, the compartmentalization of Chinese Government forces permitting the Communists to bring their overwhelming military superiority to bear individually upon isolated areas, the defection of several provinces in the northwest area of China, and the political instability in Szechuan and Yunnan Provinces all tend to support the assumption stated above.
2.
Use of the entire $75,000,000 fund for military aid to the Chinese Government would, if successful at all, merely buy time. The magnitude of previous American aid to the Chinese Government at a time when its position vis-à-vis the Chinese Communists was vastly stronger, the complete failure of that aid to prevent the rapid deterioration of the Chinese Government’s position, the absence of convincing developments which promise more effective use of further aid and the magnitude of the present disparity between the Chinese Government and Chinese Communist military strengths support this assumption.
From a further study of the problem, it would appear that any proposal for use of the funds in question for overt military assistance to the Chinese Government should offer assurances that:
(a)
Military aid will not as in the past go to strengthen the Communists;
(b)
Military aid to any area or faction will not in effect precipitate a Communist attack upon that area;
(c)
The proposed aid will not popularize the Chinese Communists within China by providing at once a straw man which they can knock down and an excuse for their own failure to solve internal problems;
(d)
The proposed aid will not obscure with evidence of U.S. intervention the main issue of Soviet imperialism in China;
(e)
The time brought [bought] by the proposed aid can and will be used to bring about a significant redress of the present unfavorable situation;
(f)
The proposed aid program will not be merely another ineffective U.S. operation in China further dragging down U.S. prestige and further augmenting anti-American feeling within China.

Finally, the fund available is not large when measured against the possible uses for it and the anticipated advantages from its use in whole or in part in China would, of course, have to be weighed against advantages which could be expected to accrue from its use elsewhere. At the same time consideration should be given to the disappointment [Page 570] and resentment which might arise in the other countries of southeast Asia if their own needs were neglected as a result of a program of aid to China which offered little possibility of success. A study is being made of the possible uses of portions of the fund in Burma, Indonesia, French Indochina, Siam, South Korea, and the Philippines.

On balance, it is believed that the use of funds provided in Section 303 of the Mutual Defense Assistance Act of 1949 to provide overt military assistance to the Chinese Government or faction thereof would not be to the interest of the U.S. It is believed, however, that some part of the funds should be reserved for possible use in supplying covert military assistance to promising resistance groups within China if and when an opportunity to do this arises and for remedying specific military supply deficiencies on Formosa if this becomes necessary and desirable.

However, it is realized that the question of supplying further military assistance in China has many military aspects and that the national interest requires the fullest examination of the problem from all of its aspects. It is accordingly believed that the National Military Establishment should be given every opportunity to contribute its views and comments to the final decision.

Recommendation:

It is recommended that arrangements be made whereby you and the Secretary of Defense may discuss this matter with the President with a view to determining as soon as possible whether further overt military aid should be provided China from the funds authorized in Section 303 of the Mutual Defense Assistance Act.