794A.5 MAP/2–551

Memorandum by the Director of the Office of Chinese Affairs ( Clubb ) to the Special Assistant for Regional Programs in the Bureau of Far Eastern Affairs ( Parelman )1


Subject: CA’s Position Regarding Projected Grant Military Assistance to Formosa

Reference is made to CA’s memorandum dated January 25, 1951, approving the allocation of $71.2 million for military aid to Formosa for FY 1951 with certain reservations, and to FE’s memorandum dated January 272 suggesting the deletion of CA’s first reservation (that no commitments or deliveries to the Chinese be made until certain basic policy decisions respecting Formosa have been reached) This approval can be taken to cover the $50 million allocation set forth in the Secretary’s letter of January 30, 1951 to the Bureau of the Budget.3

In suggesting the need for basic policy decisions respecting Formosa prior to undertaking any commitment to the Chinese respecting the implementation of the Fox Mission recommendation, CA had in mind the following considerations:

The Fox Mission recommendation for the Chinese Army and Air Force are based on the assumption that the Seventh Fleet will continue available for the defense of Formosa;
The present policy under which the Seventh Fleet is available for this purpose is temporary and nominally contingent upon developments in Korea;
Without continued availability of U.S. naval and air forces for its defenses, there is at least a strong possibility that Formosa would fall to the Communists, notwithstanding the provision of military equipment and advice.
Consequently, supplying such aid might well result in merely increasing enormously the Communist loot on Formosa if a later decision is made to withdraw U.S. naval and air support.

There is thus a certain logical relationship between decisions respecting the Seventh Fleet and implementation of the Fox recommendations. It seems worth pointing out that if we do not arrive at [Page 1565] a decision respecting the former before proceeding with the latter (and it may, of course, be impossible to follow such a logical sequence), this logical relationship will operate to make our implementation of the Fox recommendations largely prejudge our decision respecting the Seventh Fleet and to make any subsequent solution for Formosa through the UN or through negotiations relating to a Korean settlement much more difficult, if this should become desirable.

It is with these long-range consequences of the active implementation of the Fox Mission recommendations in mind, that CA would suggest avoiding commitments to the Chinese, or actual delivery of supplies, except in so far as such commitments may be supported by basic decisions and estimates regarding Formosa—some of which are still to be made.

CA is drafting a letter to the Defense Department raising certain questions regarding the basis for their current Formosa military aid programming. For example, it would be interesting to know what Defense expects to achieve with the large assistance programs contemplated for Formosa: $71.2 million programmed for FY 1951, $212 million recommended informally for FY 1952, and additional sums for FY 1953 through 1955. Is all this assistance purely for the defense of Formosa as contemplated in NSC 37/10?4 If so, how would Defense justify this aid in the light of (1) the Fox Report, indicating that a continued commitment of U.S. naval and air forces is necessary for the Island’s defense, and (2) NIE 105 (concurred in by Defense), which states that an invasion is unlikely as long as these U.S. forces are present.

The program for FY 1951 could perhaps be justified at this time as an interim measure, but until basic policy decisions respecting Formosa are made, implementation of this program will, in CA’s opinion, necessarily lack full logical justification. CA would not recommend that the policy reservation mentioned in its memorandum of January 25 be attached to FE’s approval of the allocation of funds for FY 1951, if the effect of such a reservation would be to delay implementation of the FY 1951 program. However, it is suggested that any figures used in programming for FY 1952 (or later) be considered as tentative in nature, and that formal FE approval be withheld until our questions have been answered and basic Formosa objectives clarified.

  1. The memorandum was directed to Parelman via Deputy Assistant Secretary of State for Far Eastern Affairs Livingston T. Merchant; the source text was seen by Merchant but bears no indication that Merchant approved it for transmittal to Parelman.
  2. Neither printed.
  3. Not printed.
  4. For text of NSC 37/10, August 3, 1950, see Foreign Relations, 1950, vol vi, p. 413.
  5. Dated January 17, p. 1510.