893.51/7–3146: Telegram
The Ambassador in China (Stuart) to the Secretary of State
[Received August 1—2:50 a.m.]
1235. From General Marshall. I agree with Exim Bank view that applications for credits listed in Department’s telegram 518, July 26, should not be considered pending clarification political situation China. Present situation does not warrant reversal of decision to defer definite commitment on 500 million dollar credit (Department’s telegram 643, April 13) against which the individual items listed in Department’s telegram 518 presumably would be charged, unless it be for reconstruction or repair of communications which are so urgently needed.
[Page 997]Regarding loans for rehabilitation of industrial and mining properties, I endorse views expressed in Department’s telegram 484, July 19,40 section III, that United States public funds are not designed (a) to replace or substitute for private capital where available and willing participate on reasonable terms, or (b) to finance projects purpose or result of which is acquisition or displacement of existing and economically feasible private enterprises.
In this connection, as reported in Embassy’s telegram 1137, July 14,41 and in Shanghai Consulate’s telegram 751 [1353], July 27,42 American oil companies have indicated willingness to invest in Takao refinery but have been informed foreign participation not necessary or desired except for certain technical assistance and assured supplies crude oil.
Embassy wishes stress importance basic economic policies involved and endorses in general conditions for financial assistance to China approved by NAC meeting No. 8, January 15, 1946.43 [Marshall.]