to $1,073.0 million. Approximately 97 percent of all overseas transfers of materials and services are supported by receipted transfer documents listing in detail the nature and extent of the aid furnished. (2) Lend-lease shipments to United States commanding generals earmarked for China amounting to $385.9 million against which credits for diversions to non-Chinese recipients and returns amounting to $308.6 million were applied, leaving for these shipments a net of $77.3 million as the value of actual transfers to the Chinese. (3) All other War Department transfers, amounting to $270.4 million, took place in the continental United States and are supported by transfer documents, of which approximately 98 percent are receipted by either Chinese Government representatives or their authorized agents.

The bulk of the lend-lease transfers made by the Department of the Navy were accomplished in China and in most instances are supported by receipts signed by representatives of the Chinese Government. The total lend-lease aid furnished by the Navy, according to Navy Department records, was $71.0 million, of which $66.8 million represents the value of the 96 vessels charged to lend-lease and transferred under Public Law 512 (79th Cong).

In addition to the War and Navy Department transfers, there were lend-lease transfers by Treasury Department, Maritime Commission, and other agencies totaling $135.9 million, according to Treasury Department records.

Included in the above totals are amounts resulting from transfers under the pipeline credit agreement which authorized the delivery under credit arrangements of lend-lease civilian-type equipment and supplies contracted for but undelivered on V-J Day. The agreement provided for the shipment of $51.7 million of such supplies to be paid for over a period of 30 years beginning July 1, 1947, with interest at 2% percent per year. Goods with a value of $50.3 million were actually delivered and charged to the Chinese under the terms of this agreement. Also included in the above totals are charges in the amount of $25.9 million covering certain transfers made under lend-lease for which the Chinese Government agreed to pay. No other credit arrangements under lendlease are indicated by the December 31, 1951, lend-lease reports of the Treasury Department.

The pricing policy for aid furnished under the Lend-Lease Act was United States procurement cost for new items and value based on condition for used items, plus an amount to cover packing, handling, and inland transportation. Charges for transfers out of excess military stocks overseas were United States procurement cost for new items, the value based on condition for used items, plus an amount to cover packing, handling, inland and ocean transportation (statement 1).

2. Sino-American Cooperative Agreement

The military transfers under the Sino-American Cooperative Agreement (SACO) consisted primarily of ordnance supplies furnished the Chinese between September 2, 1945, and March 2, 1946, by the United States Navy. These transfers were accomplished in fulfillment of a wartime agreement calling for the exchange of services and supplies for certain specified services provided by the Chinese Government (statement 2).

3. Transfer of United States naval vessels

A total of 131 vessels were transferred to the Chinese Nationalist Government as grant aid under Public Law 512 (79th Cong). The procurement cost of these vessels was $141.4 million, of which $74.6 million is reflected in this report as value of aid rendered under Public Law 512, and $66.8 million is reflected in the lend-lease accounts with $27.3 million prior to V-J Day and $39.5 million subsequent to V-J Day (statement 3).

4. China aid program

Through December 31, 1951, shipments to the Chinese Government made by United States Government agencies under the China aid program, for which $125 million was appropriated, amounted to $94.2 million. In addition, there was a cash advance of $28.9 million made to the Nationalist Government of China to be utilized in direct procurement of military equipment by the Chinese on the open market. A portion of the cash advance was paid to the War Assets Administration and the Office of Foreign Liquidation Commissioner for certain surplus material obtained from them.

Pricing of aid furnished by the Departments of the Army and the Air Force, which amounted to $71.8 million, was in accordance with the pricing policy established by the Department of the Army covering all military aid programs.

In accordance with this policy, actual procurement cost was charged for items procured for foreign-aid programs, plus packing, handling, transportation, and administrative costs. Full current replacement cost was charged for transfers out of stock, plus packing, handling, transportation, and administrative costs. Transfers out of excess stocks were priced at 10 percent of prices in effect in 1945, plus rehabilitation costs, packing, handling, transportation, and administrative costs (statements 4 and 4A).

5. and 6. Ammunition transferred by United States Marines

Between April and September 1947 the United States Marines in the PeipingTientsin area and the Tsingtao area transferred at no cost to the Chinese Government approximately 6,500 tons of ammunition. Complete listings of the items and quantities transferred, together with dollar values, based on estimated 1947 procurement costs, are attached (statements 5 and 6).

7. Mutual Defense assistance program

As of December 31, 1951, certain military material with a value of $24.7 million had been shipped under the mutual defense assistance program. All detailed information concerning this program is classified for security reasons.

Pricing of aid furnished under the mutual defense assistance program is in accordance with the provision set forth in section 403 of the Mutual Defense Assistance Act of 1949, as amended. (See attached secret statement 7.)

8. Sale of excess stocks of the United States Army in West China

In 1946 the United States Army contracted to transfer to the Chinese Government a broad assortment of United States Army supplies, with a depreciated landed cost value of US$67.24 million, plus CN$5.16 billion and located in west China. In return the Chinese Government agreed to pay $25 million (US) and $5.16 billion (CN) for the property transferred.

Certain terms of the agreement follow:

"ARTICLE 4. In consideration of the immediate transfer of said property, China hereby agrees to purchase and to pay for the property thus transferred, and further agrees to hold the United States harmless for all claims for rents, damages, breach of contract, or otherwise which may arise from any source whatever. **

"ARTICLE 7. China agrees to pay US$25 million and CN$5,160 million for the property thus transferred in accordance with the following terms and conditions: "a. CN$5,160 million will be deducted from the total of the CN dollar advance made by China to the United States.

"b. US$5million will be paid in cash.

"c. US$20 million will be payable in accordance with the terms of a contract to be negotiated between China and the United States Treasury Department, which contract will provide for:

"(1) Principal to be paid in 30 equal annual installments.
"(2) Interest at 2% percent.

"(3) Any surplus of settlement of United States indebtedness to China for military expenditures in excess of China's cash down payments for surplus property of the United States will thereupon be used by China for the purchase of property in the United States or will be applied to the liquidation of the unpaid balance of this contract.

"d. If at the completion of the transfer the actual net depreciated value computed as above is greater or less than the estimated net depreciated value stated herein, China's purchase price will be increased or decreased by the same percentage by which the actual net depreciated value varies from the contract referred to in c. above."

The cash down payment in United States dollars was later incorporated into the Office of Foreign Liquidation Commissioner bulk sale agreement as part of the considerations received by the United States. The Chinese obligation of $20 million was later included as one of the items presented as a United States claim in negotiations with the Chinese Government on settlement of war accounts. 9. Office of Foreign Liqudation Commissioner and War Assets Administration sale of surplus military equipment

The Office of the Foreign Liquidation Commissioner and the War Assets Administration sold material and equipment to the Chinese Nationalist Government with an estimated procurement cost of $102.0 million for $6.7 million, according to the records of the Department of State. The Chinese Government paid the

Office of the Foreign Liquidation Commissioner $2.78 million out of the $125.0 million grant authorized by the China Aid Act of 1948. (See item 4.) The remaining $3.93 million was paid to the United States Government; however, the source of these funds is not known.

10. Office of Foreign Liquidation Commissioner sale of civilian surplus property (bulk sales agreement)

Under an agreement dated August 30, 1946, the Office of the Foreign Liquidation Commissioner sold to the Chinese Nationalist Government surplus property located in China and on various islands in the Pacific. Total acquisition cost of the property covered by this agreement was $842 million, according to the records of the Department of State. The total sales price was $175 million. Of this amount $120 million was offset against obligations of the United States Armed Forces to the Chinese Government, and $55 million represents a Chinese obligation to be paid in local currency for real property to be acquired in the future for United States diplomatic and consular establishments and for the expenses of educational programs under the Fulbright Act (Public Law 584, 79th Cong.). 11. Office of Foreign Liquidation Commissioner dockyard facilities sales

The procurement cost of the property transferred under this sale was $11.5 million and the sale price was $4.1 million, according to the records of the Department of State.

12. Maritime Commission ship sales

The Maritme Commission sold the Chinese Government 43 vessels for a total sales price of $26.2 million under the Merchant Ships Sales Act of 1946. Of this amount $16.4 million was on Maritime Commission credit terms. The balance of $9.8 million was paid in cash, obtained in part through our Export-Import Bank credit. (See item 14.) The total wartime procurement cost of the 43 vessels was $77.3 million. This information was taken from page 1049 of the Department of State's United States Relations with China.

13. Assistance by American Red Cross; 15. Economic Cooperation Administration program; 16. United States foreign relief program (Department of State) The amounts indicated above regarding the aid furnished under these programs were obtained from Foreign Transactions of the United States Government released in January 1952 by the Department of Commerce, Office of Business Economics, Clearing Office for Foreign Transactions.

14. Export-Import Bank credits

Amounts reflected in this report were obtained from the Export-Import Bank. 17. United Nations Relief and Rehabilitation Administration-United States Contribution; 18. Board of Trustees for Rehabilitation Affairs

The values cited are from United States Relations With China (Department of State), page 1043.

19. Stabilization Fund Agreement, 1941 (Department of Treasury); 20, 1942 Treasury credit (Public Law 442, 77th Cong.)

The amounts of aid reported under these agreements are in accordance with the records of the Department of the Treasury.

21. Chinese student assistance (Department of State)

The amount of aid reported under this program is in accordance with records of the Department of State.

70, 988, 709. 68 1, 420, 696, 703. 31, 117, 099, 056. 91 18, 639, 481. 72

270, 643, 320, 70
365, 903. 23
47, 417. 41

563, 997, 996. 72

206, 732. 51 608, 588, 098. 07