893.50 Recovery/5–1849
Memorandum by the Under Secretary of State (Webb)
[Washington,] May 18, 1949.
Subject: Résumé of conclusions reached at the Secretary’s discussion of the ECA China program with the Under Secretary, Mr. Butterworth and Mr. Labouisse on Wednesday, May 18, 1949.
- 1.
- Shanghai—In the event that the Whangpoo River again becomes safe for commercial shipping to Shanghai before the Communists actually take control of the city, ECA might send in minimum quantities of food and petroleum necessary to prevent starvation and maintain essential electric power output. (A draft statement is attached19 for possible use if such a contingency should arise.) No further shipments of ECA cotton should be made merely to maintain employment in the mills. It was recognized that the Communists might leave the river approach to the city open and cease their military offensive in the hope of achieving a peaceful turnover, or of inducing continuation of American aid until the harvest made possible adequate food supplies from the interior. In such circumstances, cessation of U.S. aid might be attacked as abandonment of the free people of Shanghai to the Communists, or continuation of aid might be criticized as representing assistance to the Communists. Obviously, no blueprint for U.S. action can be drawn up, and any resumption of ECA shipments would have to be on a highly tentative basis.
- 2.
-
Extension of ECA aid to non-Communist areas in the
interior of China.—
- a)
- Commodity programs—No new programs of commodity aid should be undertaken by ECA on the mainland of China if Canton falls to the Communists.
- b)
- Rural Reconstruction—The Joint Commission should be encouraged to move its headquarters to Southwest China. Continuation of this program as long as feasible in non-Communist areas would be a desirable demonstration of U.S. interest in the welfare of the Chinese people without being subject to the misinterpretation regarding U.S. intentions which new U.S. programs of commodity assistance might entail. It should be made clear, however, that the U.S. can assume no responsibility for the safety and future well-being of Chinese who participate in the Rural Reconstruction Program.
- 3.
- Taiwan—No decision regarding Taiwan can be reached pending a review of the situation with Mr. Merchant who is returning to the Department for consultation. Reconsideration by the NSC20 of policy towards Taiwan may be necessary.