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

S/S–NSC files, lot 63 D 351, NSC 146 Series

No. 165
Memorandum by the Secretary of Defense (Wilson) to the Executive Secretary of the National Security Council (Lay)¹

top secret

Washington, January 26, 1954.

Subject:

• Review of Chinese Nationalist Force Levels

1. Attached is a review of the Chinese Nationalist force levels by the Joint Chiefs of Staff, taking into account the discussion of the Chinese Nationalist forces by the National Security Council at its 169th meeting on November 5, 1953, and the policy set forth in NSC 146/2.²

2. The present military aid program planned for Formosa in FY 1954 totals $359.5 million. This amount falls short of the JCS estimate of the requirements to implement NSC 146/2 by approximately $250 million. In addition, it has been necessary to transfer funds amounting to $716 million in the FY 1954 military aid program to meet emergency requirements for Indochina and other reservations. In order to meet this amount, some reduction of the Formosan program will be required during FY 1954.

3. The proposed FY 1955 Mutual Military Program contains $1,144.5 million of new obligational authority to meet military matériel and training programs world-wide. From this amount, $350 million are the estimated requirements for Indochina alone. Thus, under the present programming, it appears that funds required to implement NSC 146/2 as estimated by the JCS, cannot be made available before FY 1956.

4. There seem to be two alternatives available to the National Security Council: (1) to seek additional funds for the Formosan program by reducing other military commitments; or (2) to review the anticipated mission of the Nationalist forces as expressed in paragraph 12–a of NSC 146/2.

5. The Department of Defense, in accordance with the views of the Joint Chiefs of Staff, recommends that the National Security Council review NSC 146/2 at the earliest possible moment with a view to setting forth a mission for the Chinese Nationalist forces which can be supported within the level of the military assistance funds available.

C. E. Wilson

[Attachment]

Memorandum by the Joint Chiefs of Staff to the Secretary of Defense (Wilson)

top secret

Washington, January 18, 1954.

Subject:

• Review of Chinese Nationalist Force Levels

1. In response to your memorandum dated November 18, 1953, subject as above,³ the Joint Chiefs of Staff have reviewed the Chinese Nationalist (CN) force levels. In this review the Joint Chiefs of Staff have taken into account the discussion of CN forces by the National Security Council at the 169th meeting, on November 5, 1953, and the policy set forth in NSC 146/2.

2. The Joint Chiefs of Staff consider that to carry out the missions envisaged for the CN Army by NSC 146/2, the MDAP supported force basis must be raised from approximately 294,500 to approximately 357,000. This increase in the force basis will require additional initial equipment in the amount of $111,000,000 and will increase the annual maintenance cost by $7,400,000. It should be noted that there presently exists a deficiency of $158,000,000 in initial equipment for the CN Army and that the present annual maintenance cost is $35,000,000.

3. The Joint Chiefs of Staff feel that the CN Navy should be augmented to improve its capability to participate in the defense of Formosa, the Pescadores and off-shore islands and to increase its amphibious lift capability to a point commensurate with the ability of the ground forces to use this lift. Augmentation is also required to improve the effectiveness of coastal patrol and anti-shipping operations. Further, the CN Marine Corps should be expanded from 2 to 3 brigades. Unless the situation in the Far East deteriorates this augmentation, which will cost $10,000,000 for initial equipment for the CN Marine Corps and raise the annual maintenance cost from $28,000,000 to $30,000,000, can be stretched out over a period of several years but could be completed by June 30, 1956. However, a current initial equipment deficiency in the amount of $47,000,000 may require that this be accomplished at a slower rate.

4. The Joint Chiefs of Staff consider that the CN Air Force is handicapped in carrying out its assigned missions by the limited capabilities of the piston-type aircraft with which it is, for the most part, equipped. As piston-type aircraft are replaced by more up-to-date models and jet aircraft, and the force level is augmented by an all-weather fighter squadron, the ability of the Air Force to perform these missions will be markedly improved. Failure to provide modern aircraft will seriously limit the Air Force in its ability to accomplish its mission. This program could be completed by June 30, 1957; with $69,000,000 in fiscal year 1955, $232,000,000 in fiscal year 1956 and $42,000,000 annually thereafter.

5. Capitulation of estimated costs (in millions of dollars) of equipping and maintaining:

a. The currently approved force levels are:

	Remaining deficiencies in initial equipment	Annual recurring cost
Army	158.0	35.0
Navy	47.0	28.0
Air Force	301.0	42.0
Totals	506.0	105.0

b. The costs of the proposed additional forces are:

	Cost of additional initial equipment	Additional annual recurring cost
Army	111.0	7.4
Navy	10.0	2.0
Air Force	—	—
Totals	121.0	9.4

6. The FY 1955 MDA programs submitted by the Military Departments did not provide for all the deficiencies created by the cutback in the FY 1954 MDA program. These FY 1955 programs were further reduced by the Department of Defense. Accordingly, without substantial programming the only practicable source of funds for the recommended forces levels would be a provision for such funds in FY 1955 and subsequent budgets. If funds for the additional forces cannot be made available, the missions for the CN forces envisaged in NSC 146/2 should be re-examined with a view toward revising the missions to be within the capability of a force which can be supported by the funds available.

7. A proposed phasing by fiscal years for the attainment of the CN force levels and the aircraft program is contained in the Appendix⁴ hereto.

For the Joint Chiefs of Staff:

Arthur Radford

Chairman
Joint Chiefs of Staff

1. This memorandum and its attachment were sent to NSC members under cover of a Jan. 26 memorandum from Lay.
2. Document 150.
3. Not printed.
4. Not printed.