893.24/1104
Memorandum by the Adviser on Political Relations (Hornbeck)
Statement has emanated from the War Department that “China is being aided to the extent justified by the general situation. The Joint Board now has under consideration the desirability of augmenting aid to China.”
On the subject of aid to China, especially of aid under the Lease-Lend Act, and as regards volume, variety, priority, et cetera, “justified by the general situation”, there are a variety of opinions. In some quarters there prevails an impression that the aid which this country has already given to China has been substantial in amount and that the current flow is substantial.
In that connection, certain figures are of decided interest.
The United States has during the past four years bought silver from China, thus affording China “exchange”. This has been done, however, for the most part not in pursuit of this Government’s ultimately adopted policy of “aid to China” but in pursuit of this Government’s general silver purchasing policy, the pursuit of which policy [Page 669] at the outset injured rather than aided China but which in later stages became of substantial assistance to China. This Government has also during the past three years given China loans and credits aggregating $175,000,000, $50,000,000 of which stands as a stabilization fund. However, the thing which counts most in the field of aid to China is receipt by China of goods—especially arms, munitions and war materials in general.
Examination of trade figures brings to view certain very interesting and pertinent facts, as follows:
- a.
- During the years 1938–40 the total U. S. exports to China amounted to $168,289,000; to Japan $699,050,000. This indicates that during the three full years of the Japanese-Chinese hostilities this country supplied to Japan approximately four times as much goods as we supplied to China. In the same period U. S. exports of petroleum and petroleum products to Japan amounted to $151,076,000. This indicates that during the period under reference the dollar value of petroleum and petroleum products that we supplied to Japan was almost equal to the total dollar value of all products that we supplied to China.
- b.
- In the year 1940 total U. S. exports to China amounted to $77,956,000; to Great Britain (United Kingdom alone) $1,009,600,000. This indicates that during this one full year of Japanese-Chinese hostilities and German-British war, we supplied to Great Britain (the United Kingdom) approximately thirteen times as much goods as we supplied to China. During the months January–March 1941, total U. S. exports to China amounted to $19,988,000; to Great Britain (United Kingdom) $289,393,000. This indicates that during those three months we supplied to Great Britain (United Kingdom) approximately fourteen times the amount of goods that we supplied to China.
Recent news items are to the effect that as of May 31, 1941 more than $4,000,000,000 have thus far been allocated under the Lease-Lend Act.
According to the best information available to the author of this memorandum, the allocations made up to and as of May 31 to China under the Lease-Lend Act amounted to only $24,000,000—although various additional items were as of that date and have since been under consideration.
The logical inference from this is that at the present moment the score on Lease-Lend aid stands at somewhere between 98 and 100 units for other countries, principally the British Empire and particularly the United Kingdom, to each one unit for China.
Opinion is held and has repeatedly been expressed by the undersigned that, toward serving the general objectives of United States foreign policy and the particular objective of restraining Japan from new courses of or steps of aggression, investment in aid to China will give greater return on small outlay than will any other investment. The Chinese have been making comparatively effective resistance to Japan for four years: they have the man power and the will to continue [Page 670] this resistance. Aid from the United States, small though it has been in amount, has contributed materially toward maintenance of their will and their capacity to resist thus far. The American Government, especially the President, has given them emphatic assurance of this Government’s intention to continue and to increase in amount the aid which this country has been giving them. The Chinese rely on those assurances. They are in considerable measure dependent, for capacity to continue their resistance, upon fulfillment of those assurances. They desperately need many of the items for which they have officially made specific requests. It is greatly to the interest of the United States (and of Great Britain) that the Chinese continue their resistance (keep Japan involved in the China effort). Toward ensuring maintenance of the Chinese will and capacity to continue their resistance, it is, in the opinion of the author of this memorandum, not only desirable but essential that the flow (deliveries) of materials from this country to China be rapidly increased in amount.