Foreign Relations of the United States, 1950, East Asia and the Pacific, Volume VI

Executive Secretariat Files: NSC 37/10

Memorandum by the Executive Secretary (Lay) to the National Security Council

top secret
NSC 37/10

Washington, August 3, 1950.

Immediate United States Courses of Action With Respect to Formosa

References:	A. NSC Action No. 325 [b]1
	B. Memo for NSC from Executive Secretary, subject: “General Policy of the United States Concerning Formosa”, dated July 28, 19502

The enclosed statement of policy on the subject, approved by the Secretaries of State and Defense in accordance with the President’s approval in principle of the recommendations contained in the reference memorandum (NSC Action No. 325–b), is circulated herewith for the information of the National Security Council and the Secretary of the Treasury.

As requested by representatives of the Secretaries of State and Defense, the memorandum by the Joint Chiefs of Staff on “General Policy of the United States Concerning Formosa”, attached to the reference memorandum, is included herewith as an Appendix.³

James S. Lay, Jr.

[Annex]

Report by the Departments of State and Defense on Immediate United States Courses of Action With Respect to Formosa

1. Without prejudicing United States initiative and freedom of action as to possible future courses of action with respect to Formosa, the United States should continue the present policy of denying Formosa to communist forces.

2. The United States should take steps (a) to assess the capabilities of the Chinese Nationalist forces: (b) to insure that such Chinese Nationalist military equipment as requires maintenance be rendered usable; (c) to meet deficiencies, now known to United States military authorities, of Chinese Nationalist military supplies and material; and (d) in connection with (c) to give certain military grant aid to the Chinese Nationalist forces.⁴

3. The United States Government should make the necessary political arrangements with the Chinese Government and should direct the Commander in Chief, Far East to undertake forthwith a comprehensive military survey of the resources and needs of the Chinese Nationalist forces.

4. Accordingly, the following specific steps should be taken:

a. The Department of Defense should inform the Commander in Chief, Far East that the services of Major General Graves B. Erskine (Department of Defense) and Mr. Glen H. Craig (Economic Cooperation Administration) and their staffs are available to him for the purpose of assisting in the military survey and of translating the results of the survey into a military assistance program.

b. The Department of Defense should endeavor to insure that the services of Major General Erskine and Mr. Craig on Formosa are not interpreted as a diversion of the Erskine Mission from its task in Southeast Asia, possibly through the device of assigning these officers temporarily as individuals to assist a United States Liaison Mission to the Chinese Nationalist Government.

c. The Department of State should assign an officer to assist Major General Erskine and Mr. Craig in their work with the Chinese Nationalist Government.

1. See footnote 6 to the memorandum by the Joint Chiefs of Staff to the Secretary of Defense, July 27, p. 394.
2. Mr. Lay’s memorandum of July 28, not printed, merely forwarded the JCS memorandum to the Secretaries of State and Defense with the request that their final agreed statement on policy be transmitted to the National Security Council.
3. The JCS memorandum is printed under date of July 27, p. 391.
4. In a letter dated August 25, President Truman informed Mr. Acheson that he had allocated to the Department of Defense the sum of $14,344,500 from funds made available for “Mutual Defense Assistance” by section 2(a) of P.L. 627, approved July 31, 1950, to carry out the provisions of section 303(a) of the Mutual Defense Assistance Act of 1949, as amended. The funds were to be used for programs of military assistance for Formosa. (794A.5/8–2550)