April 3, 1946 Radio No. WAR-83057. Washington, D.C

#5-408

To T. V. Soong

April 3, 1946 Radio No. WAR-83057. Washington, D.C.

Top Secret

From General Marshall to General Gillem, his Eyes Only.

This message is reply to CFB-27205, dated 2 April 1946, from Wedemeyer.1 Please pass following to Doctor T. V. Soong: “General Wedemeyer has conveyed to me your views with respect to use of part of Eximbank loan for expenditures for labor and buildings in China and for the purchase of consumer items of raw materials. In my negotiations with US Government financial representatives, I had already stressed the points which you raised. There is a firm feeling at all financial levels in the United States Government that under the statute creating the Export-Import Bank, it should not extend credit for the purchase of consumer’s goods except in unusual circumstances such as were present in the cotton loan to China.2 Moreover, it is felt that so far as use of Eximbank funds is concerned, these should not be utilized for the payment of China domestic costs such as local labor and supplies. I feel certain that to insist upon the elasticities which you suggest would jeopardize the integrity of the entire loan and reopen proposals to charge against it Maritime Commission credits and credits for the purchase of surplus material, which as I advised the Generalissimo, I believe have been successfully though with difficulty repulsed.3 I anticipate that the Department of State and the Eximbank will open formal negotiations with respect to the loan with the Chinese Government’s representatives within the next day or two.”4 As I assume Wedemeyer has left China a copy of this message will be shown to him here.

Document Copy Text Source: George C. Marshall Papers, China Mission, Memoranda-Messages-Cables, George C. Marshall Research Library, Lexington, Virginia.

Document Format: Typed radio message.

1. See Foreign Relations, 1946, 10: 972.

2. On the $19,000,000 U.N.R.R.A. raw cotton purchase and exchange for cotton yarn, see Woodbridge et al., UNRRA, 2: 398.

3. See Foreign Relations, 1946, 10: 970–71.

4. Soong replied on April 5 that Chiang Kai-shek had asked for Marshall’s backing in making the wording of the Export-Import Bank loan “elastic” enough either to “provide cash for domestic expenditures in China,” or to permit purchases of Chinese domestic goods or raw materials. On April 9 Marshall reiterated his objections. See ibid., pp. 973–75.

Recommended Citation: ThePapers of George Catlett Marshall, ed.Larry I. Bland and Sharon Ritenour Stevens (Lexington, Va.: The George C. Marshall Foundation, 1981– ). Electronic version based on The Papers of George Catlett Marshall, vol. 5, “The Finest Soldier,” January 1, 1945–January 7, 1947 (Baltimore and London: The Johns Hopkins University Press, 2003), pp. 518–519.