Marshall Mission Files, Lot 54–D270: Telegram
Colonel Marshall S. Carter to General Marshall
83022. Your 164173 refers. Please refer to my 8158974 which pointed out the only 2 presently available methods of transferring equipment to the Chinese. No legal authority, exists for any other method until legislation is passed. After 31 October the only legal method of transfer is through the Surplus Property Act.75 Accordingly, any sale or transfer to Chinese after 31 October as proposed in 1641 must be accounted for here as a sale of surplus property.
The fact that the August 30 agreement76 did not include military items is a cogent reason why Chinese should not expect a cut rate deal for this special case. Although the general policy is not to sell military equipment through FLC surplus channels, exceptions can be made by SWNCC, as witness the 8–⅓ Group Program authority contained in 99542 of 2 March77 and 84478 of 15 April.78
The Chinese can be told substantially as indicated in your 1641 proposal, but the actual mechanics will involve declaration of surplus by Army and sale by FLC, after approved by SWNCC at a price determined unilaterally by United States in accordance with last paragraph 82599.79
- Telegram of October 12, p. 762.↩
- Telegram of September 26, p. 760.↩
- Approved October 3, 1944; 58 Stat. 765.↩
- Surplus Property Agreement signed at Shanghai; for text, see Department of State Publication No. 2655, Report to Congress on Foreign Surplus Property Disposal, October 1946, p. 40.↩
- Not found in Department files.↩
- Not printed.↩
- Dated October 8 from the Chief of Staff (Eisenhower) to Col. Caughey, not printed. Last paragraph stated that “regardless of whether Chinese accept transfer under Lend-Lease prior to 31 October, or purchase through surplus channels subsequent to that date, the selling price of the equipment will be the same, and will equal the U. S. cost of equipment plus normal transportation and handling charges.”↩