Memorandum by the Director of the Office of Chinese Affairs (Clubb) to the Assistant Secretary of State for Far Eastern Affairs (Rusk)

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Subject: Present Status of Formosa Grant Military Aid Planning.

The following summary of action to date regarding grant military aid to Formosa is furnished in response to your recent request.

Although the Fox Survey Group,1 dispatched by CINCFE2 to Formosa [Page 1509] pursuant to NSC 37/10,3 completed its work by the end of August the Department did not receive a copy of their report4 until October 31. No formal indication of Defense’s reaction to the Survey Group recommendations was received until last week, when General Scott5 transmitted Defense recommendations for the allocation of funds for FY 1950 and FY 1951. During this interim the Department took the following steps:

Approved a Defense recommendation resulting in the Shipment of $9.7 million worth of ammunition as an initial program of military assistance.6 This shipment was financed from MDA funds in the amount of $14.3 million allocated by the President to the Department of Defense on August 25.
Addressed a letter to the Department of Defense7 listing certain factors which, in the absence of concrete information regarding military aid programming, the Department believed should be taken into account. (The military aid program should be designed solely to contribute to the defense of Taiwan and, in the interest of economy, should be based on a careful study of existing stocks and a determination in each instance that the Chinese armed forces were capable of absorbing and effectively utilizing all matériel furnished.)

General Scott’s letter dated January 58 recommends that the Secretary request the President to allocate to Defense funds in the amount of $71.2 million for Formosa for FY 1950, FY 1951, and supplemental FY 1951. This sum is broken down as follows: Army, $50 million; Navy, $5.2 million; Air Force, $16 million. No justification or explanation of these figures was included. General Scott stating that detailed programs would be submitted “at the earliest practicable date”. CA’s memorandum dated January 9 to Mr. Parelman9 (copy attached) raised certain questions which may require answering before a final FE position is determined regarding the requested allocation of funds.

It is CA’s understanding that in addition to the allocation of $71.2 million requested in writing for FY 1950 and FY 1951 Defense has [Page 1510] informally indicated, for purposes of tentative budget programming, that $212 million will be recommended for Formosa for FY 1952 and that estimates for FY 1953 through FY 1955 have also been made. (CA has seen no figures for these years.) SEAC Committee minutes indicate that these annual requirements are all based on Fox Report recommendations (although it was CA’s original understanding that items recommended by the Fox Survey Group totalled only $158 million in value).

  1. The Far East Command Survey Group, headed by Major General Alonzo P. Fox, Deputy Chief of Staff, General Headquarters, Supreme Commander of the Allied Powers in Japan, conducted a survey in August 1950 of the military needs and resources of the Republic of China.
  2. General of the Army Douglas MacArthur, Commander in Chief Far East. MacArthur was also Supreme Commander, Allied Powers (Japan) and Commander in Chief, United Nations Command, Korea.
  3. For the text of NSC 37/10, August 3, 1950, see Foreign Relations, 1950, vol. vi, p. 413.
  4. Not printed; but see the summary of the report by Richard E. Johnson of the Office of Chinese Affairs, December 7, 1950, ibid., p. 591.
  5. Maj. Gen. S. L. Scott, Director of the Office of Military Assistance, Department of Defense.
  6. The Department’s approval was given in a memorandum of September 18, 1950, from John O. Bell, Acting Deputy Director, Mutual Defense Assistance, to Maj. Gen. Lyman L. Lemnitzer, Director of the Office of Military Assistance, Department of Defense; for text, see Foreign Relations, 1950, vol. vi, p. 508.
  7. For the text of the memorandum by John H. Ohly, Deputy Director, Mutual Defense Assistance, to Major General Scott, January 4, 1951, see ibid., p. 617.
  8. Major General Scott’s memorandum to the Acting Director, Mutual Defense Assistance, January 5, is not printed.
  9. The memorandum from Clubb to Samuel T. Parelman, Special Assistant for Regional Programs in the Bureau of Far Eastern Affairs, is not printed.