DEPARTMENT OF STATE Memorandum of Conversation
Date: February 15, 1949
Subject: China
Participants: Dr. V. K. Wellington Kee, Chinese Ambassador The Secretary - Mr. Acheson Mr. W.W. Butterworth, Director for Far Eastern Affairs
Copies to: S G FE GA Amembassy, Nanking Amconsul, Canton
The Chinese Ambassador called at his request and after the usual courtesies indicated that he had come to see me about three matters.
He gave a brief resumé of the situation in China with particular reference to the attempts of the Acting President to find a basis of negotiations with the Chinese Communist Party. He indicated that his Government wished to obtain the reaction of this Government and other friendly governments to the situation with which China was faced. He referred to the Chinese Government's previously expressed desires to have issued by the U.S. a sympathetic statement of support and the dispatch to China of a high military personage with staff. We discussed the situation at some length, I emphasizing the friendly interest and concern and benevolent policy which the U.S. had consistently pursued for over a century and he with no little persistence seeking to obtain some statement of commitment by me on behalf of this Government.
Secondly, he raised the question of the recent ECA announcement regarding cotton shipments to Shanghai, emphasizing the importance which the employment in cotton mills and the ensuing cotton cloth played in the life of Shanghai. Mr. Butterworth pointed out that the ECA announcement indicated that shipments were merely "suspended for the time being"; that this action was due to the stock position at Shanghai. The Ambassador was advised that in view of the vulnerability of Shanghai, ECA had deemed it inadvisable to keep large stocks on hand in that city and that future deliveries would go forward in such a way as not to hinder reasonable operation of the mills but at the same time, to avoid the maintenance of large stocks at Shanghai. The Ambassador appeared to be quite satisfied with this explanation.
He then turned to the question of American policy in Japan and represented his Government's continuing interest in the course and character of the Occupation. In particular, he referred to the alleged statements by Mr. Royall. I called to the Ambassador's attention Mr. Royall's denial and took occasion to assure him that no changes in American policy such as had been suggested in the press had been made or were in contemplation. Dr. Kee also touched on the question of SCAP extending to other than the Government arsenals the application of the Interim Reparations Directive and I parried this and went on to discuss the recent directive with respect to the attainment of economic stability for Japan and stressed the importance to all concerned that every effort be made to bring Japan to a position of self-support.
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