794A.5 MAP/3–751
Memorandum by the Director of International Security Affairs (Cabot) to the Director of the Office of Military Assistance, Department of Defense (Scott)
Subject: Military Assistance to Formosa during Fiscal Year 1952.
I refer to the Department of Defense estimate that $237.7 million will be required to furnish military assistance for the defense of Formosa during Fiscal Year 1952.
The Department of State recognizes that the situation of Formosa in relation to the over-all Far Eastern problem makes impossible the precise prediction of Fiscal Year 1952 military aid needs for both that island and other countries in the area.
The instability of the political and military situation in the Far East is such that unpredictable operational and program requirements for the armed forces of the countries in this area might emerge on very short notice. Priorities of country programs as well as adjustments among these programs must be subjected to changes to meet developments affecting the security interests of the United States. Therefore, the funds being requested to meet the military aid needs of the countries in the Far East area, including Formosa, should be allocated and dedicated to specific country programs in light of United States political and military interests at the time.
On the basis of this understanding, the Department of State agrees to the budgetary programs of military aid in the amount of $584.0 million for the Far Eastern countries, including $237.7 million for Formosa. The phasing and magnitude of the funds programmed for budgetary purposes will, at a later date, be considered jointly by the two Departments and decided on the basis of a review of the situation at the time.