893.50 Recovery/8–1549: Telegram

The Secretary of State to the Chargé in China (Clark)

TelCan 604. Letter received Aug 15 from Chinese Amb to Secy requesting mil and economic assistance for “critical” next 6 months. Request specifies 287 million dols mil assistance of which 50 million dols to purchase and coin silver for payment troops. Chinese Govt also requests Mil Mission headed by “top ranking rep” be sent China assist Chi Govt and Army in distribution and employment mil goods. Economic aid proposals are (1) “stop gap program” for use unobligated ECA funds estimated 90 million dols, of which 40 million for purchase silver to finance export strategic materials and purchase indigenous food supplies for ECA distribution, with balance used continue commodity imports, and (2) “interim aid program” consisting 36 million dols, presumably also for silver, to meet portion Chi Govt budgetary deficit.

Dept plans acknowledge Chinese letter, stating merely that it will be given careful consideration. This request apparently uncoordinated Hsu Kan approach to you reported Cantel 942 Aug 14 in view of substantial discrepancy amount of aid requested in support of fiscal operations. Since US Govt considering formal Chinese aid request, Dept sees no need advance visit Hsu Kan, and cannot, of course, indicate reaction prior full consideration of Chinese Govt’s proposals.