Foreign Relations of the United States, 1951, Korea and China, Volume VII, Part 2

793.5 MAP/4–2051: Telegram

The Chargé in the Republic of China (Rankin) to the Secretary of State

secret

Taipei, April 20, 1951—11 a. m.

1458. Profoundly hope joint tel (1453) Apr 19¹ from Moyer, Jarrett and myself will provide sufficient background to answer basic questions raised by Bureau Budget and avoid further delay in obtaining approval of $21 million FY 1951 MDAP funds for Chi Navy and Air Force.² This is short-range question of gravest urgency and shld be approved at once to assist Seventh Fleet’s immed mission whether or not mil aid to be allocated for FY 1952. Weather will be favorable for invasion of Formosa beginning next month and Chi Commies have airfields and other facilities prepared on mainland opposite to which they cld shift forces for invasion and/or large-scale air attacks in short time. Mil aid foreseen in above $21 million, notably surplus World War II fighter planes, cld spell difference between success and failure of invasion; also availability this equipment on Formosa might well be deciding factor in deterring Chi Commies from an attempt against island which almost inevitably wld involve US in open conflict with Commie Chi.

If not already done recommend Dept bring foregoing to attention Bureau Budget and any others who may be delaying action for whatever reason. They shld be made fully aware of responsibility assumed by occasioning such delay. That is the short-term problem.

Amt of $237 million MDAP FY 1952 funds recommended for Formosa by Defense Dept admittedly raised misgivings among most of us from longer-range standpoint. Without going into tech mil details this figure seems disproportionately large in relation to resources of Formosa and to global US responsibilities. Full implications apparent when it realized such quantity mil equipment spares and ammo wld bring total US financial outlay for Formosa between now and end FY 1952 to approx $500 million under all headings. Such figures liable frighten not only Bureau Budget but also Congress and public with resultant strengthening hands of isolationists.

Dept able judge most effective tactics to pursue with Bureau Budget, etc. but it may be useful in preparing alternative proposals to consider fol approach:

1. As matter of utmost urgency approx $50 million shld be made available (in addition to present ECA allocations and MDAP funds already approved for Chi Army) for remainder FY 1951 to cover $21 million MDAP for Chi Navy and Air Force plus $29 million for POL and to “compensate for econ impact”. Without such compensation mil equipment cannot be effectively utilized and Formosan econ wld be disorganized.

2. After providing for above consideration cld be given to more modest FY 1952 total for purely mil aid. Even $100 million (instead of $237) under this heading wld provide slightly more purely mil equipment, etc. than foreseen in Fox report (assuming $71 million already provided for FY 1951) which added to $150 million for regular ECA and the econ impact”, wld make total US contribution $250 million for FY 1952 compared approx $400 million if present MDAP figures are retained and resulting mil equipment effectively employed.

3. About half of FY 1952 “impact” aid wld be for non-recurring items and it shld be possible also reduce regular ECA aid after that year; $100 million plus purely mil items (totaling perhaps $50 million) shld take care of FY 1953. A further reduction shld be in order for FY 1954, assuming aid program still continuing, to perhaps $100 million altogether.

Presumably above reductions wld be less than satisfactory to Defense Dept, but I am sure they are aware of urgent need to do something at once to improve island’s defenses and that events are moving so rapidly in FE as to make any longer term mil planning for Formosa highly speculative to say least. All MDAP estimates for Formosa evidently must remain under constant review which shld be expected result in important modifications depending developments in FE. It might well be calamitous if insistance on allocations of funds in excess of demonstrable defense needs to supplement capabilities of Seventh Fleet shld cause further delays and possibly result in loss of island or worse.

Moyer and Jarrett concur.

Rankin

1. The reference telegram, a joint message for State, Defense, and ECA, not printed, recommended a total expenditure of $92,235,000, in addition to the military aid expenditures for fiscal years 1951 and 1952, to reduce the inflationary impact of the U.S. military aid program in Taiwan (793.5 MAP/4–1951).
2. President Truman informed Secretary Acheson in a letter dated May 4, 1951, of his approval of the $21 million allocation (790.5 MAP/5–451).