Memorandum of Conversation with Secretary of State Dean Acheson; Mr. Kan Chieh-hou, Personal Representative of Acting President Li Tsung-jen; Ambassador V. K. Wellington Koo; and Fulton Freeman

SECRET 002749 U in 177-a DEPARTMENT OF STATE ARCHIVES *NATIONAL SERVICE" RECORDS AND 541 Memorandum of Conversation DATE: July 1, 1949 SUBJECT: Request for U.S. Financial and Noral Assistance to Chinese National Government PARTICIPANTS: Dr. Kan Chieh-hou, Personal Representative of Acting President L1 Tsung-jen Ambassador V. K. Wellington Koo, Chinese Embassy The Secretary COPIES TO: Fulton Freeman, Asst. Chief, Division of Chinese Affairs 8/s, U G FE CA orrice of the Embassy, Canton 1-1493 Dr. Kan Ohieh-hou, accompanied by the Chinese Ambassador, called by appointment today and handed me a mesorandum illustrated by maps with regard to Acting President Li'e plans for defending south and vest China. I thanked him for the menorandum and assured him that I yould read it with interest. Dr. Kan stated at the outset that he wished to make three requests of the U.S. Government as follows: (1) that the President or I make a statement of sympathy and moral encouragement indicating continued U.S. support of the National Government; (2) that a portion of the $90 million unexpended ECA funds be used for the purchase and minting of silver for the payment of troops and stabilization of the Chinese National currency; and (3) that a top-Fanking U.S. military man be sent to China to observe and report developaents. In explanation of the second request, Dr. Kan stated that approximately 50 per cent of the total Communist forces consisted of troops which had either defected or been captured from the Nationalists; that there was at present no incentive for those troops to return to the Nationalist side since there was nothing to offer; but that, if the Nationalist troops were to be paid in silver, those forces which previously owed allegiance to the National Government would immediately desert the Communists DECLASSIFIED E. O. 11652, Sec. 3(E) and 5(D) or (E) and 7.23.75 Dept. of State letter, Aug.9,1973 By NLT. w NARS Date 4-2676 SECRET