893.50 Recovery/1–1449

Memorandum by the Director of the Office of Far Eastern Affairs (Butterworth)

Memorandum for the Record

Mr. Lovett called on his return at noon from the Cabinet meeting and requested that I record in writing the following:

In accordance with the Department’s suggestion, the subject matter of the attached memorandum45 was discussed at a full Cabinet meeting today at which the Vice President-elect46 and Mr. Hoffman were present. Mr. Hoffman advocated his point of view for three-quarters of an hour, using the same arguments he had employed on January 7 in Mr. Lovett’s office with Messrs. Labouisse, Butterworth, Cleveland and Bruce also being present. Mr. Lovett mentioned some of the larger implications involved in the problem and read the two pertinent excerpts from Title IV of the ECA Act.47 The President polled the whole Cabinet who unanimously voted that the memorandum represented their considered attitude.

The Acting Secretary also left with the President the attached memorandum regarding rehabilitation projects in Formosa48 and gave a copy to Mr. Hoffman.

The Acting Secretary also gave to the President the memorandum regarding the situation in Tsingtao and Formosa, a copy of which is also attached.49

W. W. Butterworth

Memorandum Presented to Cabinet Meeting

Following discussion of the China aid program in the National Security Council and further discussion in two meetings of the Cabinet, the President in an interview, at which Mr. Clark Clifford50 was present, communicated to the Acting Secretary of State by way of confirmation the following decisions: [Page 615]

That this Government would continue to support through the implementation of the China Aid Act the present Chinese Government or a legal successor Government which pursues an anti-Communist policy. However, should a government come into power which comes to terms with the Chinese Communists, all aid should cease irrespective of whether the Communists are in numerical ascendancy or not.
When the Chinese Communists either directly or indirectly through a coalition government take control over any area, all ECA supplies ashore or in the process of being unloaded can be distributed under conditions similar to those now prevailing. However, ECA supplies which have not yet reached such ports should be diverted elsewhere.
That the military supplies under the China Aid Act should be delivered insofar as possible in accordance with the advice of our military authorities in China.

The second sentence of numbered paragraph 1 quoted above means, of course, that aid should cease to those areas that come under the control of a government in which the Communists participate.

  1. Infra.
  2. Alben W. Barkley.
  3. The Foreign Assistance Act of 1948, approved April 3, 1948; 62 Stat. 137. The China Aid Act of 1948 constituted Title IV.
  4. For the President, January 14, p. 267.
  5. For the President, January 14, p. 265.
  6. Special Counsel to President Truman.