Foreign Relations of the United States, 1947, The Far East: China, Volume VII

893.24/10–3147

Minutes of the Meeting of the Committee of Two

[Washington,] 3 November, 1947.

• Members Present
  • Secretary Marshall
  • Secretary Forrestal
• Others Present
  • State
    • Mr. Butterworth
    • Mr. McWilliams
  • Army
    • Under Secretary Draper
    • Lt. General Lutes
    • Colonel Byroade
  • Navy
    • Secretary Sullivan
    • Rear Admiral Wooldridge
  • Air Force
    • Secretary Symington
    • Assistant Secretary Whitney
  • Office of the Secretary of Defense
    • Mr. Ohly
    • Secretary
    • Mr. Moseley (SANACC)

I. Aid to the Chinese

Decisions:

It was agreed:

a. That surplus munitions in the Marianas would be transferred under Surplus Property Act procedure, and that the State Department would approach the FLC to make the appropriate arrangements on a cash transaction basis.

b. That the 39 Division Program should be considered completed.

c. To expedite deliveries of equipment to complete the 8–⅓ Group Program, and that pressure would be put on the War Assets Administration and the Chinese to expedite negotiations and arrangements.

d. To investigate the availability of surplus munitions in the Philippines for possible transfer to the Chinese.

Implementing Action:

a. The State Department to approach the FLC to arrange for the appropriate procedures, including any further necessary agreements with the Chinese for the transfer of surplus munitions in the Marianas. The State Department to arrange for contacts with the Chinese in this connection where necessary.

b. The Army to give instructions to the overseas Commanders that the ammunition be declared surplus.

c. The Army to direct overseas Commanders to provide any necessary assistance in arranging for the transfer of the munitions in the Marianas pursuant to arrangements for transfer by FLC procedure.

d. The State Department to put pressure on WAA and the Chinese to expedite negotiations and delivery for the remaining equipment under the 8⅓ Group Program. The Army and Air Force to cooperate to make the equipment available.

e. The State Department to ask our Embassy in the Philippines to investigate the availability of surplus munitions for possible transfer to the Chinese.

Discussion:

A. Transfer of Munitions in the Marianas

Mr. Draper said that it was desirable to clarify some uncertainty which had arisen over the means of transfer of the munitions in the Marianas to the Chinese. He said that the Army had investigated and found that there was a considerable surplus of materiel in the Marianas and that considerable time, funds and personnel will have to be expended to dispose of these stocks by any method. He stated that there was no legal way by which the Army could turn over the ammunition to another nation by declaring it “unstable”. He pointed out that the only legal means of transferring this matériel is under the Surplus Property Act procedure. Apparently the most expedient method would be a supplemental agreement to the existing Bulk Sale Contract with China, permitting the transfer of munitions.

Mr. Butterworth said that State Department was agreeable to approaching the FLC to determine the best procedure for handling this transaction, and that he would get in touch with the representatives of that agency immediately.

Secretary Marshall said it appeared that new contracts with the Chinese to effect this transfer were necessary.

Mr. Draper said he thought that the Chinese would be able to provide the necessary labor to load the munitions along with the other material which they were picking up in the Islands.

Secretary Marshall said that besides furnishing the Chinese with some real material aid he believed that this transfer would have real psychological importance in boosting the morale of the Chinese Government. Mr. Butterworth raised the question of whether the transaction should be for credit or cash, pointing out that there would be much less publicity involved in a cash transaction. Secretary Marshall said that the cash transaction appeared preferable, and arrangements should be made to sell the ammunition at a very low price. He added that we could not avoid some publicity in this connection.

Mr. Butterworth pointed out that as a matter of procedure it will, of course, be necessary for the Army to declare the ammunition surplus, and the FLC will not accept it unless it has evidence of a foreign buyer.

B. The 39 Division Program

Secretary Marshall read a memorandum⁸⁹ which set forth the view of the Army that the 39 Division Program had been completed.

Mr. Draper pointed out that General Wedemeyer had also told the Generalissimo that it was considered that The 39 Division Program was now completed.

It was the substance of the discussion that the Army view was acceptable.

C. 8⅓ Group Program

Secretary Marshall read a memorandum⁹⁰ prepared by the Air Force on the status of the 8⅓ Group Program. He recalled that there had been previous agreement to go ahead and complete this program. He pointed out that Mr. Butterworth had already arranged for the War Assets Administration to earmark 50 C–46’s for the Chinese. He added that these planes were reported to be in good condition, that the price was low and that we were now urging the Chinese to buy them. He pointed out that the basic need of the Chinese is for transport planes.

Mr. Butterworth said that the State Department was ready to go ahead now to expedite negotiations for the sale of the repair equipment which is now located in Hawaii. He said that the Department would put pressure on the WAA as well as the Chinese in this connection.

Mr. Symington pointed out that even if the 8⅓ Group Program was completed the amount of planes and spare parts involved would still be far short of what the Chinese want and expect. He said that the Air Force was looking further into this matter. Mr. Whitney said that the inefficiency of the Chinese Air Force was such that he thought we might investigate to see whether we could help them by furnishing them additional advisory personnel. Mr. Butterworth said that the training of the Chinese Air Force was quite efficient, but that their methods of operation were different than ours and that little could be done to help them in this respect. Secretary Marshall stated that we must accept the fact that they do things differently and less efficiently than ourselves.

Mr. Whitney said that we have no fighter aircraft in the Pacific to complete the program and that we will have to find new sources in this country. Mr. Butterworth pointed out that he was advised that there were available planes of this type now being held in Dayton.

D. Possible Availability of Surplus Munitions Sold to the Philippines

Secretary Marshall said that it had been called to his attention that this government had recently approved the sale of over 100,000 tons of surplus munitions to the Philippines. He said that the question had been raised of possibly arranging for the re-transfer of some of this to the Chinese.

Mr. Butterworth said that he would arrange to have our Embassy in the Philippines investigate this matter.

E. Wedemeyer Report

Secretary Forrestal recalled that at the last meeting discussion on the Wedemeyer report had been deferred. He inquired what action the State Department was taking with respect to the report.

Secretary Marshall said that the State Department was actively working on the report and that particular attention was being given to the military phase as well as the financial phase. He said that the Department was studying the extent and the form of further assistance to the Chinese, and what controls would be necessary. He summarized by saying that apparently everyone is in agreement that we wish to prevent Soviet domination of China and that we wish to do something to provide for a stable government there, but there is no unanimity on the way in which assistance can be rendered. He said that the immediate problem is to determine what can we do effectively. He said that we must recognize that we have the problem of prolonging the agonies of a corrupt government, and that we probably have reached the point where we will have to accept the fact that this government will have to be retained in spite of our desire to change its character. He said that he was of the opinion that we cannot afford to make the Wedemeyer Report public as to do so would do much more harm than good.

Secretary Forrestal said that he was concerned that it has never properly been publicized that the Russians are as committed to support the present Chinese Government as we are. He pointed out that the average person is unaware of this and he thought something should be done about it. Secretary Marshall said that he was fully conscious of this fact, and that he was considering bringing this point out as a possible maneuver at the forthcoming meeting of the Council of Foreign Ministers.

Mr. Butterworth said that care should be taken not to release information regarding the transfer of munitions to the Chinese during the Council meeting. Secretary Marshall said that our negotiations with the Chinese should be kept as quiet as possible and that any publicity regarding the transfer of matériel should come after the Council meeting.

Mr. Draper said that Secretary Royall also wished to have the point made that there should be no publicity about private manufacturers’ replacing ammunition which the Army may advance to the Chinese pursuant to a private contract now being negotiated by the Chinese with an American manufacturer.

II. Withdrawal of American Forces from China

Decision:

None

Implementing Action:

The Secretary of Defense to provide information to the Secretary of State regarding the latest figures on the withdrawal of Army, Navy and Marine personnel in China.

Discussion:

Secretary Marshall referred to his discussions with Mr. Molotov during their meeting in Moscow in March 1947, at which time the latter addressed a letter to Secretary Marshall making inquiry about the number of American Forces to be left in China.⁹¹ Secretary Marshall said that in his reply⁹² to Mr. Molotov’s letter he stated that the United States had announced that upon the termination of hostilities in China our Forces there would be reduced considerably. He said that he had pointed out in this letter that when current reductions were completed (estimated date June 1, 1947) there would remain, at the request of the National Government of the Republic of China, approximately 6,180 military and naval personnel. Secretary Marshall asked Secretary Forrestal to have a check made on the status of withdrawals to date.

89. November 1, p. 905.
90. Not found in Department files.
91. See letter dated March 24, p. 622.
92. Dated March 31, p. 622.