Memorandum by the Director of the Office of Far Eastern Affairs (Butterworth) to the Secretary of State
The attached ECA telegram (To ECA 1340 April 1398) indicates that the ECA China Mission has been able to adjust its commodity procurement schedules under the residual $53.7 million program so as to continue food and petroleum deliveries substantially through the next harvest (September 15) without disturbing $25 million of residual funds reserved for industry on Taiwan and for continuation of the rural reconstruction program. This adjustment has been accomplished by concentrating available commodity funds on cereals, cutting petroleum deliveries to the bone, and eliminating raw cotton entirely. However, the mission reports that the Chinese are developing plans for procurement of cotton on their own account.
The mission’s reference to CUSA (Chinese Government) concurrence in this program indicates that ECA’s reservation of $25 million for other than commodity procurement has been made known to the Chinese. This revelation would appear to have been unnecessary under the China legislation as just passed by Congress99 which authorizes the President to extend aid in such manner and on such terms and conditions as he may determine.