893.50 Recovery/5–549
Memorandum of Conversation, by the Chief of the Division of Chinese Affairs (Sprouse)
Mr. Ford13 called today by appointment and handed me the attached document14 regarding supplies for Shanghai on which he desired to have some clarification for the British Foreign Office.
I informed him, as Mr. Butterworth and other officers of the Department had previously explained to Mr. Graves15 and Mr. Ford, that ECA had on hand in Shanghai sufficient cotton stocks for about two [Page 642] or two and a half months, that it was continuing to supply sufficient cereals to carry through during the interregnum and that it was keeping sufficient petroleum supplies to keep the power company going through such a period. I pointed out that this might mean that a certain amount of stocks would be available at the time of a Communist take-over of the city but that it was impossible to cut the margin too closely.
With respect to the inquiry in the document presented by Mr. Ford regarding an arrangement whereby ECA stocks would be released to some other body and supplied by them to Shanghai, I pointed out that for ECA to take action which would in effect result in the delivery of such stocks to areas taken over by the Chinese Communists would represent an evasion of legislation authorizing ECA aid to China and also an evasion of a clearly expressed intent of the Congress.
Mr. Ford said that he would communicate the gist of the foregoing to the British Foreign Office for its information.