793.56/2–150

The Secretary of Defense (Johnson) to the Secretary of State

top secret

My Dear Mr. Secretary: I am enclosing a copy of the recommendations which the Joint Chiefs of Staff on 20 January 1950, submitted to me, at my request, regarding the emergency fund of $75,000,000 for the general area of China. My request to the Joint Chiefs was made pursuant to paragraph 3. m. of NSC 48/21 and following consultations between representatives of the Defense and State Departments at which general agreement was reached concerning the assumptions on which planning should proceed.

Without taking a position on these recommendations at this time, I am submitting them to you now in order that the military point of view may be considered in the joint planning of this fund. From this planning there will presumably be developed a joint recommendation which you and I may make to the President on the program called for in NSC 48/2.

Sincerely yours,

Louis Johnson
[Enclosure]

Memorandum by the Joint Chiefs of Staff to the Secretary of Defense (Johnson)

top secret

Subject: Program of Assistance for the General Area of China.

The Joint Chiefs of Staff have considered your memorandum, dated 10 January 1950,2 wherein you request that they submit a statement of recommendations concerning the position which the Department of Defense should take with respect to programming assistance in the general area of China to carry out the provisions of Section 303, Mutual Defense Assistance Act of 1949.3

The problem has been examined and there has been prepared, from the military point of view, a statement of recommendations for your [Page 6] consideration and such action as you deem appropriate. In this connection, the Joint Chiefs of Staff are becoming concerned as to the increased military liability which apparently is developing in the Far East. Future allied military requirements in that area, which must of necessity be underwritten if not furnished directly by the United States, will surely increase if the Communist advance continues its penetration into Southeast Asia. Section 303 of the Act is an immediately available vehicle which could be used advantageously to alleviate this situation.

In the preparation of the statement of recommendations in paragraph 6 below the Joint Chiefs of Staff have recognized that overt assistance from the United States in the political field, and perhaps in the economic and psychological fields, to certain countries or regional leaders who are resisting Soviet-led Communism, may be pre-eminent in furthering the objectives established for the United States in Public Law 329—81st Congress (Mutual Defense Assistance Act of 1949). However, since such matters are beyond the purview of the Joint Chiefs of Staff, it is intended only to take cognizance of the importance of the nonmilitary factors and how they may ultimately affect the military position of the United States in the Far East. The attainment of minimum U.S. objectives in that area will require of the United States and all like-minded peoples, the integration of those political, economic, psychological as well as purely military means which are essential to prevent the domination of the Far East by Soviet-led Communism.

The statement of recommendations herein is consistent with and is believed to fall within the scope of NSC 48/2 and the Presidential statement in connection with his approval of that paper. However, because of the terms of the legislation authorizing the $75,000,000 and the President’s statement, it has yet to be determined whether any or all of the funds will be available for the implementation of a program.

The Joint Chiefs of Staff further wish to point out that the preparation of recommendations for the utilization of the $75,000,000 is rendered extremely difficult by the lack of official political guidance as to where in Asia the United States will direct its efforts toward preventing the spread of communism. NSC 48/2 explicitly establishes as one of the basic U.S. security objectives with respect to Asia the “development of sufficient military power in selected non-Communist nations of Asia to maintain internal security and to prevent further encroachment by Communism.” It would appear that military aid must be directed toward these selected nations. The selection will presumably be materially affected by political considerations. Firm guidance [Page 7] on this subject will allow for definitive recommendations from a military standpoint as to the ultimate utilization of the $75,000,000 fund.

Meanwhile, the Joint Chiefs of Staff, from a military point of view, believe that a program utilizing the $75,000,000 appropriation for the general area of China is desirable, is entirely feasible, and, although limited when considering the problems of this huge area, can be most effective as an initial investment for a long-range program to deter or prevent the further encroachment of Communism in the Far East. Accordingly, the Joint Chiefs of Staff recommend that:

a. A program of overt assistance and … operations in the general area of China be initiated as early as possible.

b. The program of assistance be conducted concurrently in the countries below with emphasis in the order listed:

Indo-China,4 Indonesia,5 Thailand6 and Malaya.

Although Burma is in a critical position, political chaos in that country might well preclude realization of any effective results from an aid program. However, the possibilities of ameliorating the situation in Burma should be investigated, and if considered to contain possibilities, Burma could be allotted funds from the reserve fund.7

c. Concurrently with the program of assistance, the possibility of initiating covert operations directed towards China including Taiwan (Formosa) and Tibet be studied.8

d. Cognizance be taken of the discretionary powers accorded by the legislation to the President to execute a program for the general area of China without adherence to the administrative procedures established for the other portions of the Mutual Defense Assistance Program.

e. Tentatively, the allocation of funds be approximately in the amounts shown below, but subject to change as actual programs are developed:

(1) For direct and immediate usage in accordance with the above:

Indo-China $15,000,000
Indonesia 5,000,000
Thailand  10,000,000
$30,000,000

[Page 8]

(2) As a contingency reserve of $45,000,000 the exact use of which will be determined later, but which might be allocated in the following amounts in accordance with the above:

Malay States $5,000,000
Burma 10,000,000
9 China (including Taiwan and Tibet)  30,000,000
$45,000,000

f. A director be appointed who, with a small staff, will be responsible for the detailed development of the program for the general area of China and the supervision of the implementation of the program by all appropriate executive departments and agencies of the U.S. Government under the coordination of the Secretary of State.

g. Final determination as to the programs and the exact nature and magnitude of projects for specific countries or locales be made as early as practicable after the preparation by the director of a tentative detailed program.

For the Joint Chiefs of Staff:
Omar N. Bradley

Chairman
Joint Chiefs of Staff
  1. For NSC 48/2, “The Position of the United States with Respect to Asia,” a report to the President by the National Security Council, December 30, 1949, see Foreign Relations, 1949, vol. vii, Part 2, p. 1215. Paragraph 3.m reads as follows: “The sum of $75,000,000 for assistance to the general area of China, which was made available under Section 303 of the Mutual Defense Assistance Act of 1949, should be programmed as a matter of urgency.” President Truman approved NSC 48/2 on December 30, 1949, subject to the following statement with respect to paragraph 3.m. “A program will be all right, but whether we implement it depends on circumstances.”
  2. Not printed.
  3. 63 Stat. 714.
  4. For documentation on military assistance to Indochina, see pp. 690 ff.
  5. Documentation on United States relations with Indonesia includes material on military assistance; see pp. 964 ff.
  6. For the Policy Statement on Thailand, October 15, 1950, which contains information on military assistance to that country, see p. 1529.
  7. For documentation on United States relations with Burma, including material on military assistance to that country, see pp. 229 ff.
  8. For documentation on United States policy toward China, including material on military assistance to the Republic of China, see pp. 256 ff.
  9. Footnote in the source text deleted.