793.56/2–1450
The Secretary of State to the Secretary of Defense (Johnson)
My Dear Mr. Secretary: Reference is made to your letter of February 14 and to my acknowledgment of February 21.1 Your letter asks whether the Department of State considers that the United States policy in administering PL 512, 79th Congress,2 PL 472, 80th Congress3 [Page 326] and Executive Order 98434 in respect to cash sales to the Chinese National Government is superseded by the President’s press statement of January 5.
As stated in my acknowledgment of February 21 the Department of State immediately following the issuance of the President’s statement of January 5 regarding Formosa, instituted a review of the activities of this Government concerned with military assistance to the Chinese Government. This review has necessarily been delayed due to concurrent and pertinent developments.
On January 12 at the Press Club I made the following comment relative to the President’s January 5 statement: “The materials which are now being shipped to Formosa are being paid for by the National Government of China, and those payments have been made either out of their own funds or out of the remaining part of the $125 million which was appropriated by the Congress. These goods are being shipped at the present time. They are being shipped under export licenses and there is no intention or desire to interfere with their shipment.”5
I believe that the President in stating that “the United States Government will not provide military aid or advice to Chinese forces on Formosa” intended to preclude the further supply of military matériel from United States stores beyond those in the process of procurement and delivery from funds under the $125 million grants already transferred by the Chinese Government to the Department of Defense. It is my opinion that the statement “the resources on Formosa are adequate to enable them to obtain items which they might consider necessary for the defense of the island” was intended to allow for Chinese Government purchases of military matériel in the American commercial market with its own funds.
If you can concur in this interpretation, it would appear proper that the Department of Defense, when orders currently in the process of procurement and delivery from funds under the $125 million grants already allocated to the Department of Defense have been completed, discontinue procurement for the Chinese Government or the transfer of military matériel from U.S. Government stocks to the Chinese Government. The President’s statement would also appear to require that no assistance or advice be given to the Chinese Government in their purchase of any other military matériel.
Sincerely yours,