Foreign Relations of the United States, 1952–1954, China and Japan, Volume XIV, Part 1

793.5621/9–3053

No. 140
The Secretary of Defense (Wilson) to the President

confidential

Washington, September 30, 1953.

Dear Mr. President: Public Law 188, 83d Congress, authorizes the President to lend or otherwise make available to any friendly foreign nation in the Far Eastern area, with or without reimbursement, and on such terms and under such conditions as the President may deem appropriate, a maximum of twenty-five naval vessels not larger than the destroyer type, and such assorted minor miscellaneous craft, naval services, training, technical advice, facilities and equipment, as he may deem proper.

The Chief of Naval Operations has requested that the Navy be authorized to proceed with plans to make two destroyers available to the National Government of the Republic of China under the authority of Public Law 188. The vessels would be transferred on a loan basis, for a period of not more than five years, and subject to other terms and conditions which would be specified in an agreement which the Secretary of State would be requested to negotiate with the Chinese Nationalist Government. Such terms and conditions would include the following:

1. The National Government of the Republic of China will retain possession of and will use the destroyers in accordance with conditions contained in the Mutual Defense Assistance Agreement between the United States and the National Government of the Republic of China.¹

2. The loan will remain in effect for five years from the date of delivery of the vessels but the United States may terminate the loan at an earlier date if such action is necessitated by its own defense requirements.

3. The National Government of the Republic of China will have the use of all outfitting, equipment, appliances, consumable stores, and spares and replacement parts on board the vessels at the time of their delivery.

4. While the National Government of the Republic of China may place the vessels under its own flag, title to the vessels and all nonconsumable equipment aboard them will remain in the United States. The National Government of the Republic of China will not relinquish physical possession of the vessels or any non-consumable equipment aboard them without consent of the United States.

5. The National Government of the Republic of China will renounce all claims against the United States arising from the transfer, use or operation of the destroyers, and will save the United States harmless from claims asserted by third parties in such connection.

6. Upon expiration or termination of the loan, the vessels will be redelivered to the United States in substantially the same condition as when transferred, except for fair wear and tear or for damage caused through action by a hostile force. Should either vessel be lost or damaged through action by a hostile force, the National Government of the Republic of China will be exempt from liability for such damage or loss; should either vessel be lost or damaged through other causes, the National Government of the Republic of China will pay the United States fair and reasonable compensation as may be agreed upon. Should either of the vessels sustain damage from any cause, such as in the opinion of the National Government of the Republic of China renders it a total loss, the United States will be consulted before the vessel is declared a total loss.

The above terms and conditions are substantially the same as those governing the recent loan of an aircraft carrier to France² and the proposed loans of two submarines apiece to the Governments of Italy and Turkey.³

The Joint Chiefs of Staff have determined that the two destroyers can be manned by the Chinese Nationalists in the last half of fiscal year 1954, and have recommended that they be transferred as early as practicable after January 1, 1954. It is anticipated that the activation of the destroyers will be completed in time to meet this schedule. All expenses involved in the activation of the vessels will be charged to funds programmed for the National Government of the Republic of China under the Mutual Security Act.

Pursuant to the requirements of Public Law 188, I have determined, after consultation with the Joint Chiefs of Staff, that the transfer of two destroyers to the National Government of the Republic of China is in the best interests of the United States.

Your approval of the loan of the two destroyers, subject to the terms and conditions specified above, is recommended. The Department of State and the Foreign Operations Administration concur in this recommendation.⁴

With great respect, I am,

Faithfully yours,

C.E. Wilson

1. For text of the agreement, effected by an exchange of notes at Taipei on Jan. 30 and Feb. 9, 1951, see TIAS 2293 or 2 UST (pt. 2) 1499.
2. An agreement between France and the United States, concerning the loan of an aircraft carrier to France, was effected by an exchange of notes at Washington on Sept. 2, 1953; the text is in TIAS 2907 or 5 UST 137.
3. The text of an understanding between Italy and the United States concerning the loan of two submarines to Italy, effected by an exchange of notes at Washington on Apr. 27, 1954, is printed in TIAS 3124 or 5 UST (pt. 3) 2617; the text of an agreement between Turkey and the United States, effected by an exchange of notes at Ankara on Feb. 16 and July 1, 1954, is printed in TIAS 3042 and 5 UST (pt. 2) 1663.
4. Secretary Wilson informed Secretary Dulles in a letter of Oct. 30 that the President had approved the loan of the two destroyers. (793.5621/10–3053) An agreement concerning the loan of the destroyers was effected by notes signed at Taipei on Jan. 13, 1954; for the text, see TIAS 2916 or 5 UST 207.