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573
95-3
FASTERN
of
AIR MAIL
be
AUG 2 Y1944
DEPUTY . R
- 2 -
Departipent of Otate
573
ATP
2264, March 4, 1944 (regarding the financing of U. S.
Army expenditures in China), that the Minister of Finance
and other officers of the Chinese Government have
recently been giving emphasis to the need for importa-
tion of goods as a major measure to sustain China's
economy and to check inflation.
The Ministry of Finance has been anxious to increase
the air tonnage into China from Assam in order to provide
approximately 2,000 tons a month of commercial goods.
Through the Ministry of Communications, it was requested
that C-46 planes be substituted for the C-47 planes at
present being flown by the China National Aviation
Corporation, so as to increase the "hump" tonnage. It
is my understanding that this request was referred
through military lend-lease channels to the War Depart-
ment and that a reply was received to the effect that
all allocations of C-46 planes for 1944 have already
been made and none are available for the Assam-China
service of C.N.A.C.
The question of increased air tonnage into China is
not dependent only on the provision of additional planes.
SERVICE
There are involved such additional problems as (1) the
may
limitations on the present "air corridor" between Kunming
and Assam, (2) air base facilities in Assam, (3) shortage
of gasoline stocks and spare parts, and (4) limitations
on the haulage capacity of the Assam railway, and of the
water route up the Brahmaputre, et cetera.
And, of course, of overwhelming importance is the
need for all available air tonnage to supply our air
force in China, as well as the transportation of arms
and munitions for the Chinese military establishment.
It is my understanding that Lieutenant General
Joseph Stilwell, commanding the American forces in this
theater, is firmly opposed to the use of air tonnage for
the purpose of importing commercial goods into China,
insisting that all available tonnage and any possible
increased tonnage must be used for military purposes.
The Chinese, however, persist in emphasizing the
need for commercial goods to aid China's rapidly deter-
iorating economy and to check the runaway inflation.
On the overall problem, no one can dispute the
soundness of the Chinese argument for the early and
rarid development of means of supply of consumer goods
for China. On the problem of air transport for such
goods, no intelligent observer can deny that some atten-
tion must be given to the rapidly deteriorating economic
position. The military attitude on the subject should
be tempered by intellagent consideration of the difficult
and rapidly deteriorating economic position. I am not
inclined to agree with Minister of Finance Kung that the
importation of say 2,000 tons of commercial cargo monthly
would have a marked effect on the economic situation and
serve to steady and improve the price situation. In my
conversations with Dr. Young, he has not advanced such
an idea, but he does insist that the psychological effect
of
Not printed.
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Context sent to Scholar
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"ocrText": "573\n95-3\nFASTERN\nof\nAIR MAIL\nbe\nAUG 2 Y1944\nDEPUTY . R\n- 2 -\nDepartipent of Otate\n573\nATP\n2264, March 4, 1944 (regarding the financing of U. S.\nArmy expenditures in China), that the Minister of Finance\nand other officers of the Chinese Government have\nrecently been giving emphasis to the need for importa-\ntion of goods as a major measure to sustain China's\neconomy and to check inflation.\nThe Ministry of Finance has been anxious to increase\nthe air tonnage into China from Assam in order to provide\napproximately 2,000 tons a month of commercial goods.\nThrough the Ministry of Communications, it was requested\nthat C-46 planes be substituted for the C-47 planes at\npresent being flown by the China National Aviation\nCorporation, so as to increase the \"hump\" tonnage. It\nis my understanding that this request was referred\nthrough military lend-lease channels to the War Depart-\nment and that a reply was received to the effect that\nall allocations of C-46 planes for 1944 have already\nbeen made and none are available for the Assam-China\nservice of C.N.A.C.\nThe question of increased air tonnage into China is\nnot dependent only on the provision of additional planes.\nSERVICE\nThere are involved such additional problems as (1) the\nmay\nlimitations on the present \"air corridor\" between Kunming\nand Assam, (2) air base facilities in Assam, (3) shortage\nof gasoline stocks and spare parts, and (4) limitations\non the haulage capacity of the Assam railway, and of the\nwater route up the Brahmaputre, et cetera.\nAnd, of course, of overwhelming importance is the\nneed for all available air tonnage to supply our air\nforce in China, as well as the transportation of arms\nand munitions for the Chinese military establishment.\nIt is my understanding that Lieutenant General\nJoseph Stilwell, commanding the American forces in this\ntheater, is firmly opposed to the use of air tonnage for\nthe purpose of importing commercial goods into China,\ninsisting that all available tonnage and any possible\nincreased tonnage must be used for military purposes.\nThe Chinese, however, persist in emphasizing the\nneed for commercial goods to aid China's rapidly deter-\niorating economy and to check the runaway inflation.\nOn the overall problem, no one can dispute the\nsoundness of the Chinese argument for the early and\nrarid development of means of supply of consumer goods\nfor China. On the problem of air transport for such\ngoods, no intelligent observer can deny that some atten-\ntion must be given to the rapidly deteriorating economic\nposition. The military attitude on the subject should\nbe tempered by intellagent consideration of the difficult\nand rapidly deteriorating economic position. I am not\ninclined to agree with Minister of Finance Kung that the\nimportation of say 2,000 tons of commercial cargo monthly\nwould have a marked effect on the economic situation and\nserve to steady and improve the price situation. In my\nconversations with Dr. Young, he has not advanced such\nan idea, but he does insist that the psychological effect\nof\nNot printed."
}