Foreign Relations of the United States, 1950, East Asia and the Pacific, Volume VI

Department of State Executive Secretariat Files: Lot 63D351: NSC 48 Series

National Security Council Progress Report by the Under Secretary of State (Webb)

top secret

[Washington,] February 27, 1950.

Memorandum for Mr. James S. Lay, Jr., Executive Secretary, National Security Council¹

Subject: First Progress Report covering period until January 30, 1950, on implementation of NSC 48/2, “Position of the United States with Respect to Asia,” dated December 30, 1949.²

The nature of this paper is such that in many cases it brings together in one document statements of policies upon which the National Security Council has made separate recommendations and on which detailed progress reports are submitted. Other portions of NSC 48/2 deal with long-range matters and recommend general over-all policies which can only be implemented over the course of time and are not in all cases susceptible to periodic review. The following report, therefore, will deal in brief and general terms with those portions of NSC 48/2 which have been specifically implemented or with respect to which action has been begun during the first 30 days following the approval of NSC 48/2.

It should be pointed out that Ambassador Philip Jessup is now on a journey to Asia where he either has visited or will visit most of the areas discussed in the report. Upon his return and as a result of his findings it should be possible to make more detailed assessment of the recommendations in this paper and the possibilities of their implementation. It should also be noted that the Department of State is sponsoring a conference in Bangkok, beginning on February 13, of all the Chiefs of Mission in the area, at which time over-all United States policy for Asia will be discussed. As partial preparation for this meeting, all officers concerned were furnished with copies of NSC 48/2 so that the recommendations therein could be in the minds of all participants during the conference.

With regard to those portions of NSC 48/2 which lend themselves to specific comment, the following paragraphs summarize the action taken in each case:

1b, 2c, mid 3m

In regard to 1b, 2c, and 3m, recommendations have been formulated for the provision of sufficient military power in Indonesia and Thailand from the $75 million under Section 303 of Public Law 329 to maintain internal security. The Thai Government has made a balanced and formal request which is being studied by the National Defense Establishment. A similar request has been received from the Republic of the United States of Indonesia. It is understood that the Joint Chiefs of Staff have tentatively agreed on allocation of $10 million for Thailand, and $5 million for Indonesia.

In connection with the foregoing, it is understood that the Joint Chiefs of Staff have also recommended the allocation of $15 million for Indochina. It is expected that as soon as the United States of America has given recognition to Vietnam, Laos and Cambodia steps will be taken to develop a program for using the $15 million.

The development of a Military Aid Program for the abovementioned three countries is being handled in such a way as to appeal to the Asiatic nations as being compatible with their national interests.

3c(1)

Efforts are being made to send a mission to Southeast Asian countries to expedite action facilitating economic development. Recognizing that Point IV funds may not be available for several months it is hoped that Point IV type activities and perhaps some modest capital expenditure may be possible under Section 303 of Public Law 329. Country studies are also being made from material available in Washington and field officers have been instructed to make preliminary studies and recommendations.

3c(2)

The United States stockpiling program, of course, stimulates imports from the Far East since a substantial proportion of stockpile items come from this area. Proposed rubber legislation is in process which is designed to permit more liberal treatment of natural rubber imports.

3c(3)

The stockpiling program is currently acquiring substantial amounts of materials from the Far East. Negotiations with the Dutch and Indonesians are near completion which will materially increase the purchase of tin ore and metal.

3c(6)

Preparations are in process for tariff negotiations with Korea in the fall of 1950 anticipating Korea’s adherence to the General Agreement on Tariffs and Trade. Efforts are being made to secure Most Favored Nation treatment for Japan on a bilateral basis through the means of the trade agreements which SOAP negotiates with numerous countries.³

3e(1)

In compliance with a United Nations General Assembly Resolution of October 21, 1949, co-sponsored by the United States, a reconstituted, seven-nation United Nations Commission on Korea has authority to observe and report any developments which might lead to or otherwise involve military conflict in Korea.⁴

3e(2)

Approval of a $60 million request to complete a $120 million FY 1950 ECA aid program for Korea is awaiting Congressional approval. The ECA has submitted to the Bureau of the Budget a FY 1951 Korean program of $115 million. Approximately $10.2 million is presently earmarked for Korea from Title III MDAP funds. On January 26 a military agreement was signed with the Government of the Republic of Korea. Based on this agreement and the recommendations of an MDAP Survey Team report, a program covering the expenditure of Title III funds for Korea, which has Korean Government approval, is being reviewed by the Foreign Military Assistance Coordinating Committee. An agreement with the Government of the Republic of Korea covering the presence in Korea of a United States Military Advisory Group was signed on January 26.^*

3f(1)

The United States continues to recognize the National Government of China and is giving no serious consideration to recognition of the Communist regime. The United States Government has made clear to other friendly governments its views respecting the Chinese Communist regime and its belief that hasty recognition should be avoided and that there should be full exchange of views prior to any action. It has recognized that final decision respecting recognition will have to be made by each country in the light of its own judgment and interests.

3f(2)

The Communist seizure of part of the American Consulate General at Peiping, following a series of serious incidents involving American official personnel in Communist areas and adumbrating, in the continued absence of diplomatic relations, further, perhaps more serious incidents, has led to a decision by the United States Government to withdraw all official personnel from Communist areas in China. This decision has been announced. When the withdrawal is completed, no official channels for contact with elements in Communist areas will remain. The problem of maintaining our cultural and informational program in China at the most active feasible level, which is made much more difficult owing to Communist restrictions, is receiving intensive consideration. (See also past Progress Reports on implementation of NSC 34/1 and 34/2).⁵

3f(3)

Nothing to be reported at this time.

3f(4)

The Department of Commerce on November 4, 1949, brought all 1A and some IB exports from the United States to China under control by placing them on the “positive list” of items controlled to all destinations except Canada. The Department of the Army has advised SCAP of the criteria deriving from NSC 48/2 which should govern control of Japanese exports to China and adjacent areas. The Department of State is attempting to obtain final agreement by the United Kingdom Foreign Office to the contents of parallel memoranda to be submitted by the United States and United Kingdom Governments to the French, Dutch, and Belgian Governments requesting a common policy of control over 1A exports to China. The Department of State is also working out the details of an arrangement to be carried out in collaboration with the British and Dutch Governments for informal control through the major oil companies of petroleum sales and shipments to China.⁶

3g(1)

The United States Government is continuing to follow the policy set forth in NSC 37/2 and 37/5⁷ respecting Formosa. United States policy lines were further laid down by the President in his public statement of January 5.⁸ Pursuant to NSC Action No. 254^† of October 20, 1949, Generalissimo Chiang Kai-shek was informed on November 3, 1949, of the position of the United States respecting Formosa. Legislation has been introduced in the Congress to permit continuance of the ECA program on Formosa from February 15, 1950, when the present authorization for the use of funds expires, until June 30, 1950.

3h

In regard to 3h the United States is attempting to resolve the colonial-nationalist conflict in Indochina in so far as it can do so and in view of the fact that a large part of the nationalist element is communist-led. In this connection the United States expects to recognize Vietnam, Laos and Cambodia at about the same time that Great Britain and various Commonwealth governments extend recognition. It is hoped that such acts of recognition will help persuade the noncommunist nationalists to support a non-communist Vietnam. It is further expected that subsequent to recognition ECA aid and Point IV technical assistance will be extended when possible.

3k

The speech of the Secretary of State at the National Press Club on January 12, 1950,⁹ which reviewed United States Far Eastern policy, was the first step in implementing the recommendations of this paragraph in so far as gaining support in the United States for our Asiatic policies is concerned. With respect to our information program abroad, steps have been taken to increase the effectiveness of this program in Southeast Asia and an additional million dollars has been allotted for this purpose.

James E. Webb

1. Drafted on February 24; circulated in the National Security Council on February 27.
2. For text of NSC 48/2, see Foreign Relations, 1949, vol. vii, Part 2, p. 1215.
3. Documentation is scheduled for publication in volume i
4. For documentation on the adoption and implementation of the General Assembly resolution, see Foreign Relations, 1949, vol. vii, Part 2, pp. 940 ff.
5. Details on action regarding Korea are given in periodic reviews of NSC 8/2. [Footnote in the source text. For documentation on United States policy toward Korea, including information on the military assistance program, see volume vii . For NSC 8/2, “The Position of the U.S. with Respect to Korea,” March 22, 1949, see Foreign Relations, 1949, vol. vii, Part 2, p. 969.]
5. NSC “34/1, “U.S. Policy Toward China,” January 11, 1949, and NSC 34/2, same title, February 28, 1949, are printed in ibid., vol. ix., pp. 474 and 491 respectively.
6. For documentation on the United States trade embargo against mainland China, see pp. 619 ff.
7. For NSC 37/2, “The Current Position of the United States with Respect to Formosa,” February 4, 1949, and NSC 37/5, “Supplementary Measures with Respect to Formosa,” March 1, 1949, see Foreign Relations, 1949, vol. ix, pp. 281 and 290, respectively.
8. For the text of the President’s statement on Formosa, released by the White “House on January 5, 1950, see Public Papers of the Presidents of the United States: Harry S. Truman, 1950 (Washington: Government Printing Office, 1965), pp. 11–12, or Department of State Bulletin, January 16, 1950, p. 79.
9. NSC 37/8, as amended. [Footnote in the source text. For NSC 37/8, “The Position of the United States with Respect to Formosa,” October 6, 1949, see Foreign Relations, 1949, vol. ix, p. 392.]
9. For text, see Department of State Bulletin, January 23, 1950, pp. 111–118.