270. Despatch From the First Secretary of Embassy in the Republic of China (Lacey) to the Department of State 1
REF
SUBJECT
- PL–480:4 China Renews Request for More Agricultural Commodities
Summary. The Government of the Republic of China has asked United States authorities to reconsider its previous requests for the purchase of more Public Law 480, Title I, surplus agricultural commodities, totaling US$23.65 million in export value. The Embassy does not believe the request can be justified on the grounds of economic need or of agricultural sales promotion by the U.S.
A very considerable part of the commodities requested—wheat, cotton and barley in the total amount of US$15.7 million—would actually strain available storage and financing facilities in Taiwan if delivered in the fiscal year 1958 and would complicate further the problems of disposing of large rice stocks.
The Taiwan economy in 1958 could absorb modest amounts of soybean oil, canned lard, tobacco, tallow, and dairy products (totaling some US$5.2 million in value) and could probably do so without increasing consumption requirements significantly and therefore without increasing the island’s dependence upon U.S. aid. Sale of these commodities might help to keep prices down somewhat and doubtless would help appease some Chinese officials who have expressed dissatisfaction with the relatively small amount of PL–480 aid that has been granted to China to date.
However, it has already proven very difficult to develop projects requiring PL–480 derived local currency, which are mutually acceptable to the Country Team, the PL–480 Interagency Committee in Washington and the Chinese Government. In view of the large amounts of local currency that are constantly building up under the regular aid program it will prove even more difficult to find beneficial uses for additional PL–480 proceeds.
[Here follows a five-page analysis of the Chinese request, and five attached enclosures relating to the request, including the text of the May 13 memorandum from the Foreign Ministry to the Embassy conveying the request.]
- Source: Department of State, Central Files, 411.9341/7–1157. Confidential.↩
- In despatch 281, the Embassy reported on a new P.L. 480 request from the Republic of China. (Ibid., 411.9341/1–1157)↩
- In despatch 208, the Embassy reported on a request from the Foreign Ministry to purchase soybean oil under P.L. 480. (Ibid., 411.9341/11–1956)↩
- P.L. 480 was the Agricultural Trade Development and Assistance Act of 1954, enacted July 10, 1954. (68 Stat. 454)↩