893.10/11–2751
The Chargé in the Republic of China (Rankin) to the Department of State
No.220
Ref:
Subject: Conversation With President Chiang Kai-shek on Budget and Financial Controls.
At 10:30 this morning I called on President Chiang Kai-shek in order to present Dr. Hubert G. Schenck, the new Chief of the ECA/China Mission. After an initial exchange of courtesies, the President asked Dr. Schenck what he considered to be the major problem here. Dr. Schenck referred the question to me, and I expressed the opinion that our major problem is to make the most effective use of all available resources, both Chinese and American, in developing our joint programs on Formosa. I said that I thought our resources this year would be adequate for the purpose, but that there would be various limiting factors, such as the availability of certain commodities and military equipment, which necessitate close and constant coordination and study if optimum results are to be obtained.
I then asked the President’s opinion on the effectiveness of the Economic Stabilization Board, with particular reference to its new duties in the budgetary field. I remarked that giving the Board responsibility for studying and discussing all budgets, military and civilian, national and local, accomplishes the important function of centralizing and correlating all basic information on government finances before it is transmitted to the Executive Yuan. I expressed the opinion that the coordinated budget planning thus provided for would be most valuable in preserving economic stability and obtaining maximum results from the funds expended.
The President replied that he was pleased by the way the Economic Stabilization Board is carrying out its budgetary responsibilities. In particular, he expressed appreciation of American help and advice in this connection. He hoped that we would help them find additional ways of saving money and thereby bring the budget into balance. [Page 1856] I noted with gratification that the Economic Stabilization Board is to be supplied regularly with full information on current income and expenditures under all headings, including those of all Government-controlled enterprises. I thought that centralizing all available facts and figures in this way is essential to making the best use of all of our resources.
Finally I inquired as to what he had heard was being accomplished by General Chase’s fiscal officers, who are acting in an advisory capacity to the Ministry of National Defense. The President replied that he had received no direct reports in this connection, but he knew that they were being very helpful in preparing the 1952 budget. He appreciated this assistance.
- See footnotes 1 and 2 to telegram 563, p. 1841.↩
- The reference telegram, not printed, suggested that when Rankin introduced Schenck to the Generalissimo he should prepare a memorandum of the, conversation, including the latter’s remarks on the arrangements for budgetary control, in order to record his approval (794A.5 MAP/16–3151).↩