CO129-619-1 Parliamentary delegation to China 1-9-1947 - 23-12-1947 — Page 127

12.

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General Marshall between them succeeded in bringing the Generalissimo to a more coniliatory frame of mind, but Communist intransigence combined with Kuomintang reaction produced the final broakdown in negotiations

which has been described in another Section.

Marshall left China in January, 1947.

General

7. In pursuance of the policy laid down on

December 15th 1945, and reiterated in a further

Presidential statement on December 18th 1946, that the

establishment of peace and unity in China must precede

the grant of American economic assistance the United

States Government have so far not vouchsafed any large-

scale aid to Chiang Kai-shek's Government. A sum of

V.S $500 millions carmarked for China by the Import-

Export Bank continued to be withheld and finally lapsed

on June 30th, 1947. The Chinese Government did, however, obtain on August 31st, 1946 an agreement by which they took over U.S.$800 millions worth of American non-warlike

surplus stores from the Pacific Islands in settlement

of the outstanding American debt to China for services

to the United States armed forces in China during the war.

No aircraft, ammunition or weapons were included in

these stores.

8. At the beginning of 1946, when hopes of a Kuomintang-Communist reconiliations wore bright, a Bill

was introduced to the United States Congress providing

for large-scale military aid to China by means of a

scheme for the amalgamation of the Nationalist and Communist forces and the creation of an efficient army

which it was claimed would be available to the United

Nations Security Council for preservation of peace in the

/Far