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Major W. C. Donaldson, 36. New York City, N.Y., Executive Officer, and the heads of six G-5 branches: Colonel Carl Junge, 45, Lincoln, Nebr., Lieutenant-Colonels Herman A. Hauch, 35, Marathon, N.Y., Walter G. Sylvester, 31, Jersey City, N.J., Paul J. B. Murphy, 55, Staunton, Va., A. J. Binsfield, 45, Des Moines, Ia., and Wesley B. Edwards, 32, Washington, D.C.
The G-5 offices in Chungking are the nerve centre of a network of activities that affect or are affected by every military action in China. From here decisions come that reflect the desire of the Theatre Commander to exploit every opportunity to improve military strategy by improving civilian relationships and by increasing the volume of Chinese-produced war materials and essential civilian goods.
To carry out this policy, the G-5 section has been sub-divided into six branches, each with independent as well as many inter-locking functions and each in turn co-operating with United States and Allied civilian agencies, such as the United States Office of War Information, the Office of Strategic Services, the American Production Mission, British and French Information Services and Missions, the United Nations Relief and Rehabilitation Agency, and numerous Chinese civilian and government organisations.
Requirements and Assignments Branch.
The first of the branches is Requirements and Assignments under Lieutenant- Colonel Hauk, which was primarily organised to meet problems of military lend- lease aid to China. However, since the main and almost the only means of trans- porting commodities into China is controlled by the United States army, G-5 is responsible for determining through G-4 (supply) the total military needs, so that a ceiling may be placed on civilian lend-lease shipments.
Officers of this branch work in conjunction with civilian experts of the United States Foreign Economic Administration ((F.E.A.), who screen civilian request to determine the priority according to need, and submit requests, based on their studies, for approval by G-5.
Production Branch,
The Production Branch is directed by Lieut.-Colonel Sylvester and is assigned to stimulating Chinese industry with the immediate object of securing all possible military supplies from China itself, thus reducing the long haul and expensive procurement problems which must otherwise be met.
Helping the Production Branch in this programme are some 25 civilian production men from all fields, in China as members of the American Production Mission, successor to the Nelson Mission. The American Production Mission has the primary duty of supplying qualified technical advisers to the Chinese War Production Board which was set up last fall on the pattern of the W.P.B. in Washington.
Very encouraging results have been attained through these efforts. Produc- tion of both military and essential civilian goods has already shown some improve- ment, and while the greater part of the military requirements still have to come over the Hump or Stilwell Road from India, China's industry is assuming more and more of the burden.
Speaking of this aspect of the G-5 programme, General Olmsted points out that it has a long range as well as a short range application. Besides meeting immediate military needs, the increased production skills and industrial knowledge that result are the best kind of guarantee for a strong and united China after the war.
By stimulating Chinese interest in their own capabilities and natural resources, the Production Branch has done much to encourage an economically sound China for the years to come.
Procurement Branch.
The third of the branches, Procurement, led by Lieutenant-Colonel Paul J. B. Murphy, is closely allied to the Production Branch, since it is usually the job of Procurement to obtain supplies that have been manufactured through the efforts of the Production Branch.
The policy followed by the Procurement Branch in making purchases in China is to buy as much as possible on a reverse lend-lease basis. Selling in this way, China is approaching, to some degree at least, a pay-as-you-go economy in wartime; post-war debts should be greatly reduced through this means. However, the application of reverse lend-lease is greatly complicated by China's rather unsteady finances and spiralling inflation.
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This branch works closely with relief agencies, notably U.N.R.R.A., in achieving maximum co-ordination in the solution of specific problems, such as the refugee situation existing to-day in Kweichow Province.
Another activity of the Procurement Branch also made more difficult by inflation is handling fiscal problems met by United States Forces in buying from China. One problem is the tax remission which is paid by the Chinese Govern- ment on all military purchases. Ferreting out and determining the taxes, particu- larly the indirect taxes, on any given purchase, is a hard job.
Clandestine Branch.
The last of the G-5 branches is the intriguingly-named Clandestine Branch, under Lieut.-Colonel Wesley B. Edwards, which is the co-ordinating organisation for all quasi-military activities.
The mission of the Clandestine Branch is co-ordination of the efforts of United States, Chinese and other Allied groups in order to combine their resources and achieve maximum striking power against the enemy through quasi-military
means.
The results of the work of the G-5 section are relatively difficult to analyse although some of it appears in production statistics, more in the increasing volume of military necessities delivered by Chinese manufacturers, and even more in the costly yards gained and bases recovered in the present successful Chinese drives to clean out the corridor of occupation.
However, the real gauge of the success of General Olmstead and his helpers, like the contribution of the other sections of General Wedemeyer command, lies not in single achievements or accumulation of achievements. but in the overall success of the military effort they all serve.
Civilian Economy Branch.
The Civilian Economy Branch, under Lieut.-Colonel Bainsfeld, has as its main purpose the control of the inflationary process. There seems to be little chance that inflation in China can be stopped altogether and efforts at the present time are mainly intended to hold back until more normal times in the post-war era permit China to reestablish her finances and assume the command of the economic structure of the country that the present situation makes impossible.
In April, General Olmsted, accompanied by Dr. T. V. Soong, now President of the Executive Yuan and then Minister of Foreign Affairs, went to Washington to secure economic advice and sanctions to carry out this objective. As a result several changes have been introduced into China's economy. The gold policy has been corrected and the flow of gold into China has been resumed. Some civilian consumer goods have been brought in and have been used to barter for more essential supplies in areas where finances are particularly critical.
A second function of the Civil Economy Branch is developing measures to combat hoarding. Rationing and price control have proved impossible without the more closely organised machinery of the western world. China, for example, has no accurate census, and setting up a rationing system would not only be impracticable because it wouldn't work. The only way to prevent hoarding in China is to make it economically undesirable to hoard and recommendations are now being prepared to enforce the registration of all holdings of essential materials, and it is hoped, by the use of taxes and other means, to achieve the same results that rationing would have in a more closely controlled economy.
The Civilian Economy Branch represents the theatre commander in relations with American and Allied business interests in China. Businesses now here often have access to facilities or materials that can be used in the military pro- grammes and new corporate interests or those wishing to expand their trade in China are screened to insure that their activities will not interfere with the conduct of the war.
This branch takes an important part in representing the theatre commander in relations with United States organisations such as the O.W.I., or with Chinese and Allied organisations primarily concerned with civilian affairs.
A less complex, though important, duty of the Civilian Economy Branch is the control of civilian traffic on military aircraft and transport in general. In transportation-starved China, civilian passengers find it difficult to move on anything other than military planes. It is the responsibility of the civilian traffic control officers and men to see that all civilian traffic is controlled and limited to that dictated by military necessity.
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