Rankin Files: Lot 66 D 84
The Chargé in the Republic of China (Rankin) to the Chief of the Military Assistance Advisory Group, Formosa (Chase)
Dear General Chase: At my meeting with the Ministers of Foreign Affairs and Finance1 last evening we discussed your communication of September 17 to General Chou2 regarding military budgets and budgetary control. In general, the two ministers were in full agreement with your recommendations. However, they raised the following points:
- 1.
- The new plan involves at least one important change which is a matter of high policy: the proposed transfer of authority over budgetary matters from the Chief of Staff to the Minister of National Defense (your paragraph 4). The ministers personally favored such action. However, they remarked that the Minister of National Defense3 himself preferred not to take a position in this matter, apparently to avoid creating the impression that he was seeking more power, and that a decision of a higher level than General Chou’s was required in any case. They queried me as to what General Chou’s reaction was to this proposal in his discussions with you. I replied that I did not know in detail but understood that he had raised no objection.
- 2.
- A somewhat less significant change but nevertheless one of considerable importance organizationally is the proposal to divide the military establishment into about five groups for budgetary and accounting purposes (your paragraph 3), according to the two ministers. Again, they are inclined to favor your recommendation. It was pointed out, however, that this might bring up several old issues such as the status of the Combined Service Forces, created several years ago on American recommendation to support all other branches but in practice today serving only the Army. They remarked that the Generalissimo had long favored more or less parallel treatment for the Air Force and Navy, but that opposition from these services had prevented its realization. The ministers indicated that similar opposition to a system of combined budgetary control might be expected. However, they advanced these points by way of explanation and not because of any objection to the new plan on their part.
- 3.
- The ministers commented on the use of the word “supervise” in your paragraph 13a. They remarked that the nearest Chinese equivalent is stronger than the English in meaning, and questioned [Page 1815] whether we intend to give direct administrative responsibility to American officers in the Chinese military establishment. I said that I thought not and that perhaps the expression “advise in” might be substituted for “supervise”. I should appreciate having your opinion on this point.
- 4.
- The Finance Minister expressed the urgent hope that, whatever may be decided as to your recommendations, nothing should be permitted to delay actual work on the 1952 military budget.
I gathered that the two ministers were fundamentally very much in favor of your recommendations and are only concerned lest we should not be willing to push them enough to overcome possible opposition among the military. In this connection, I assured them that we felt strongly as to the principles involved, although we were ready to discuss details so as to facilitate the implementation of the recommendations in the simplest and most expeditious manner possible.
It is understood that General Chou will not reply in writing to your September 17 communication, in view of the considerations mentioned above. After reading the present letter and discussing the points raised with anyone who you think might have further ideas to contribute, I suggest that we get together to consider whether a more formal communication to the Chinese Government on the same subject may be in order.
Sincerely yours,