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Special Message to the Congress on the Need for Assistance to China.

February 18, 1948

To the Congress of the United States:

On several occasions I have stated that a primary objective of the United States is to bring about, throughout the world, the conditions of a just and lasting peace. This is a cause to which the American people are deeply devoted.

Since V-J Day we have expended great effort and large sums of money on the relief and rehabilitation of war-torn countries to aid in restoring workable economic systems which are essential to the maintenance of peace. A principle which has guided our efforts to assist these war-torn countries has been that of helping their peoples to help themselves. The Congress is now giving careful consideration to a most vital and far-reaching proposal to further this purpose-the program for aid to European recovery.

I now request the Congress to consider the type of further assistance which this country should provide to China.

A genuine friendship has existed between the American people and the people of China over many years. This friendship has been accompanied by a long record of commercial and cultural association and close cooperation between our two countries. Americans have developed a deep respect for the Chinese people and sympathy for the many trials and difficulties which they have endured.

The United States has long recognized the importance of a stable Chinese nation to lasting peace in the Pacific and the entire world. The vast size and population of China make her an important factor in world affairs. China is a land with rich tradition and culture and a large and energetic population. It has always been our desire to see a strong progressive China making a full contribution to the strength of the family of nations.

With this end in view, we have supported the National Government of China since it first came to power 20 years ago. China and the United States were allies in the war against Japan and as an ally we supported China's valiant war efforts against the Japanese. Since the Japanese surrender we have provided a great deal of additional assistance. Military aid was given the Chinese Government not only to help defeat the Japanese invaders but also to assist in reoccupying Japanese-held areas. The United States contributed the major share of the extensive aid received by China under the program of the United Nations Relief and Rehabilitation Administration. We made available to the Chinese Government at minimum cost large quantities of surplus goods and equipment of value to China's economy. We are currently extending further aid to China under our foreign relief program.

Nevertheless, the Chinese Government and people are still laboring under the double and interrelated burden of civil war and a rapidly deteriorating economy. The strains placed upon the country by eight years of war, and the Japanese occupation and blockade have been increased by internal strife at the very time that reconstruction efforts should be under way. The wartime damage to transport and productive facilities has been greatly accentuated by the continued obstruction and destruction of vital communications by the Communist forces.

The civil warfare has further impeded recovery by forcing upon the Government heavy expenditures which greatly exceed revenues. Continual issuances of currency to meet these expenditures have produced drastic inflation with its attendant disruption of normal commercial operations. Under these circumstances China's foreign exchange holdings have been so reduced that it will soon be impossible for China to meet the cost of essential imports. Without such imports, industrial activity would diminish and the rate of economic deterioration would be sharply increased.

The continued deterioration of the Chinese economy is a source of deep concern to the United States. Ever since the return of General Marshall from China, the problem of assistance to the Chinese has been under continuous study. We have hoped for conditions in China that would make possible the effective and constructive use of American assistance in reconstruction and rehabilitation. Conditions have not developed as we had hoped and we can only do what is feasible under circumstances as they exist.

We can assist in retarding the current economic deterioration and thus give the Chinese Government a further opportunity to initiate the measures necessary to the establishment of more stable economic conditions. But it is and has been clear that only the Chinese Government itself can undertake the vital measures necessary to provide the framework within which efforts toward peace and true economic recovery may be effective.

In determining the character and dimensions of the program which might be suited to this purpose, we have had to take into account a number of diverse and conflicting factors, including the other demands on our national resources at this time, the availability of specific commodities, the dimensions and complexities of the problems facing the Chinese Government, and the extent to which these problems could be .promptly and effectively alleviated by foreign aid. United States assistance to China, like that provided to any other nation, must be adapted to its particular requirements and capacities.

In the light of these factors, I recommend that the Congress authorize a program for aid to China in the amount of $570 million to provide assistance until June 30, 1949.

The program should make provision for the financing, through loans or grants, of essential imports into China in the amount of $510 million. This estimate is based upon prices as of January 1, 1948, since it is impossible at present to predict what effect current price changes may have on the program. Revised dollar estimates can be presented in connection with the request for appropriations if necessary. The essential imports include cereals, cotton, petroleum, fertilizer, tobacco, pharmaceuticals, coal and repair parts for existing capital equipment. The quantities provided for under this program are within the limits of available supplies. The financing of these essential commodity imports by the United States would permit the Chinese Government to devote its limited dollar resources to the most urgent of its other needs.

The program should also provide $60 million for a few selected reconstruction projects to be initiated prior to June 30, 1949. There is an urgent need for the restoration of essential transportation facilities, fuel and power operations, and export industries. This work could be undertaken in areas sheltered from military operations and could help in improving the supply and distribution of essential commodities.

As in the case of aid to European recovery, the conduct of this program of aid should be made subject to an agreement between China and the United States setting forth the conditions and procedures for administering the aid. The agreement should include assurances that the Chinese Government will take such economic, financial and other measures as are practicable, looking toward the ultimate goal of economic stability and recovery. The United States would, of course, reserve the right to terminate aid if it is determined that the assistance provided is not being handled in accordance with the agreement or that the policies of the Chinese Government are inconsistent with the objective of using the aid to help achieve a self-supporting economy.

Pending establishment of the agency which is to be set up for the administration of the European Recovery Program, the assistance to China should be carried forward under the existing machinery now administering the foreign relief programs. Legislation authorizing the Chinese program should make possible transfer of the administration of the Chinese program to the agency administering our aid to European recovery. The need for authority in the administering agency to make adjustments in the program from time to time will be as great here as in the European Recovery Program.

The proposed program of aid to China represents what I believe to be the best course this Government can follow in the light of all the circumstances. Nothing which this country provides by way of assistance can, even in a small measure, be a substitute for the necessary action that can be taken only by the Chinese Government. Yet this program can accomplish the important purpose of giving the Chinese Government a respite from rapid economic deterioration during which it can move to establish more stable economic conditions. Without this respite the ability of the Chinese Government to establish such conditions at all would be doubtful. The achievement of even this limited objective is of such importance as to justify the proposed program of aid.

I recommend, therefore, that this program be given prompt and favorable consideration by the Congress.

HARRY S. TRUMAN

Note: The President approved the China Aid Act of 1948 (title IV of the Foreign Assistance Act) on April 3, 1948 (62 Stat. 158). He signed the Foreign Aid Appropriation Act, which included provisions for assistance to China, on June 28 (62 Stat. 1054).

For the President's statement upon signing the Foreign Assistance Act of 1948, see Item 64.

Harry S Truman, Special Message to the Congress on the Need for Assistance to China. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/232326

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