Memorandum of Conversation, by the Secretary of State

Participants: Dr. V. K. Wellington Koo, Chinese Ambassador
The Secretary of State—Mr. Acheson
Mr. W. W. Butterworth, Director for Far Eastern Affairs

[For the first part of this memorandum, see volume VIII, “Political and military situation in China”, chapter II.]

Secondly, he79 raised the question of the recent ECA announcement regarding cotton shipments to Shanghai, emphasizing the importance which the employment in cotton mills and the ensuing cotton cloth played in the life of Shanghai. Mr. Butterworth pointed out that the ECA announcement indicated that shipments were merely “suspended for the time being”; that this action was due to the stock position at Shanghai. The Ambassador was advised that in view of the vulnerability of Shanghai, ECA had deemed it inadvisable to keep large stocks on hand in that city and that future deliveries would go forward in such a way as not to hinder reasonable operation of the mills but at the same time, to avoid the maintenance of large stocks at Shanghai. The Ambassador appeared to be quite satisfied with this explanation.

[Here follows section on U.S. policy in Japan.]

D[ean] A[cheson]
  1. The Chinese Ambassador.