794A.5/8–2350
The Department of State to the British Embassy
Aide-Mémoire
The Department of State, having reference to the President’s statement of June 27, 1950 announcing inter alia that the Seventh Fleet had been ordered to prevent hostilities between Formosa and the mainland, hereby surveys for the information of the British Embassy the various channels now available to the National Government for [Page 445] the procurement of military matériel in the United States. The attention of the British Embassy is invited particularly in this connection to the circumstance that the Chinese Communists have on numerous occasions within recent weeks re-emphasized their determination to attack Formosa, and have so disposed of their ground forces on the mainland that a Communist attempt to invade Taiwan remains a dangerous possibility in spite of the efforts of the United States to effect the neutralization of Formosa in a military sense. It is logical to assume that the furnishing of certain requisite items of military equipment to the Chinese forces on Formosa would serve as an additional element to discourage such an attack. It is therefore considered necessary to give due regard to any deficiencies that might exist on the island in terms of military equipment in order that the Chinese military establishment located there may act effectively in its own defense. There have, therefore, been introduced recently some modifications into previously existing arrangements respecting the procurement of military matériel, as indicated below.
The United States Government is continuing to provide assistance to the National Government under the $125 million grants appropriated under the China Aid Act of 1948, and various Governmental agencies are procuring matériel to meet specific requests submitted by the National Government.
Under the authorization of Public Law 512 of the 79th Congress, the United States Navy may sell to the National Government equipment to maintain vessels which it has transferred to the Chinese Navy. The United States Navy is continuing to give consideration to National Government requests for purchases of this nature.
The various agencies of the Department of Defense have now been authorized to sell to the National Government any matériel under United States control provided there is no Service objection to such sales. The National Government can thus make cash purchases under authorization of Public Law 329, section 408(e) 81st Congress, and can also purchase surplus matériel if such is available.
The National Government continues to have normal access to the commercial arms markets of the United States.
Under the various authorizations indicated above the National Government is in a position to negotiate for the purchase of any item of military equipment desired.
The United States Government has reviewed its policy regarding the issuance of export licenses to the Chinese Government for jet aircraft and medium or heavy tanks in the light of recent developments in the Far East and the increased importance of Chinese Government defense requirements. After thorough consideration it has been decided that the United States Government cannot logically continue to prohibit the exporting by the Chinese Government of jet aircraft and [Page 446] medium and heavy tanks if such equipment is found to be available in excess of the needs of the United States defense establishment, given the politico-military situation indicated in the opening paragraph above.
In any instance where a purchase is being made through an agency of the United States Government, the needs and commitments of this Government will be taken into consideration prior to the fulfillment of the request.
The above procedures govern purchases by the National Government from its own funds. The United States Government is currently giving consideration to the matter of dispatch of a military mission to survey the defense needs of National Government forces on Formosa with the view to possibly providing some grant aid to the National Government. In the meantime, consideration is being given to the furnishing of military assistance without cost to the National Government on a limited basis and in accordance with established procedures under the Mutual Defense Assistance Act of 1949, as amended. The National Government has not been informed of this possible development. The furnishing of grant aid on a program basis, except for possible limited emergency supply action, would not be undertaken prior to the effecting of the aforementioned survey and then only depending upon the recommendations of the military survey mission.
The Department of State is cognizant of the concern of His British Majesty’s Government with the matter in point and will not fail to keep the British Embassy informed in respect to developments in this field. It may be stated at this time, however, that the American policy with respect to Formosa is firmly based on the President’s statements of June 27 and July 19, 1950 and that there is no intention to depart from the principles enunciated therein. Particularly, the American action of June 27 with respect to Formosa is not to be regarded as a stepping-stone for either an American advance against the mainland, or as a preparation for returning Generalissimo Chiang Kai-shek to the mainland with American support.