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

Executive Secretariat Files: NSC 92 Series

Memorandum of Conversation, by the Ambassador at Large (Jessup)

top secret

[Washington,] December 14, 1950.

Subject: Action in the NSC, December 14.

Participants:	The Secretary
	Mr. Harriman1
	Mr.Thorp
	Mr. Barrett
	Mr. Jessup

The Secretary said that in regard to the question of economic and financial measures against China the discussion had brought out that the proposed additional measures would have no real effect upon the Chinese but that in terms of United States public opinion the contemplated steps would need to be taken. It was decided that he and Secrecretary Snyder should arrange to put the freezing procedures into effect when they considered it wise. It was noted that Treasury and State had reached an understanding that Saturday,² midnight, would be an appropriate time to do this. The Secretary had, however, pointed out in the meeting that if the UN Entezam Committee were in the midst of discussing with us the cease-fire at the time we should not announce action which might give the Chinese the excuse to say that they had turned down the cease-fire because of what, we had done.³ Treasury will be guided by the views of the State Department on that point. A number of those at the meeting agreed that it would be desirable if our action were not taken unless and until international sanctions were applied but it was agreed that we probably could not defer our action that long.

The proposed substitute language for the concluding paragraph in NSC 92 was not submitted⁴ and there was no agreement upon any particular language of that kind. The agreed action was that the President authorized the Secretaries of State and Treasury to go ahead with the freezing procedures when they decided it was the time to do it.

The Secretary had said he thought it was necessary for us to notify certain friendly governments and there had been no dissent. The Secretary suggested that we might tell them that we were considering this measure. He emphasized the importance of secrecy on the whole question.

The question of using the IMF procedures for purpose of this notification was not suggested at the meeting.

The Secretary stated that reference had been made to a ticker report that there had been a heavy Chinese air attack against our forces being evacuated at Hungnam. General Bedell Smith⁵ gave some information on this matter. The Secretary and Mr. Harriman agreed that we must be very careful about the issuance of any orders as a consequence of such action if it is confirmed.

Philip C. Jessup

1. W. Averell Harriman, Special Assistant to President Truman.
2. December 16.
3. For documentation pertaining to the Entezam Committee, see volume vii .

4. The proposed substitute language referred to had been drawn up in discussions between State and Treasury Department officials who also took into account the views of the Joint Chiefs of Staff. It reads as follows:

   “The United States should establish immediately controls necessary for embargoing all exports from the United States to Chinese Communist destinations, blocking all Chinese Communist assets in the United States, and preventing ships of United States registry from calling at Chinese Communist ports. The United States should notify friendly countries of its intent in this regard prior to three o’clock on the afternoon of December 16, at which time the controls should be applied subject to such exceptions as may, hereafter, be deemed to be in the national interest. These controls should be administered in such a way as not to cause hardship to areas of the Far East under the jurisdiction of friendly countries.” (NSC 92 Series)

5. Walter Bedell Smith, Director of the Central Intelligence Agency.