U.S. AID FOR CHINA

Chronicle (Levin), 10 September 1949, Page 5

U.S. AID FOR CHINA

(N.Z.P.A.

, — Reuter.

Did Chiang Abscond With Country's Gold?

Copyrlght)

Receive'd Friday 8.50 p.m. WASHINGTON, Sept. 8. Senator Tora Connally, chairman of the Senate Foreign Relations Committee, said today that the Administratiou would aecept a plan to 'grant 75,000,000 dollars in aid to non-Communist China on condition that President Truraan -retained complete control over its use. Senator Connally said the discretionary^und was designed as a compromise to meet Republiean demands for aid to China. It would not speeifically prode military assistance but eould be so used if President Truman saw fit. The non-Communist war lords and others in •China would have to take the first step in submitting plans for the use of American funds. The Ameriean Government then would have to approve the plans and closely audit the use of the funds. The Chinese Embassy today sharpely denied the eharge bv Senator Connally that Chiang Kai-shek 'fabsconded". with 138,000,000 dollars of the Nationist Government 's gold reserves. The embassy acknowledged that a' "major portion" of the Xationalist Government's gold and silver reserves were transferred to Formosa when the advancing Communist armles threatened to capture the capital at Nanking, but the Embassy added that this money "has remained in the name of the National Government and was not taken by the Generalissimo for his own use or credited to his name. There was tio absconding by the Generalissimo with any publie funds for his own use." The Unitod Press's Nanking correspondent savs a Communist-sponsored i political eonsultation conferenee will forin a new republic of China and eloct a new National Government probably by Oetober 10, it was learned today. Inforniants said the conferenee seheduled to open tomorrow in Peiping was expeeted to last a month. Reuter says the Xationalist forees have re-entered Juehehg 100 miles north of Canton, aeeording to tlie National Defence Ministrv in Canton. The newlv re-organised Communist Kwangtung-Tvwangsi column of irregulars entered the East River region of Xortheastern Kwangtung. It is a eolumn assigned to the task of attacking Canton from Eastern Kwangtung. The Xationalists elainx to have re-oceupied Kaiangtan 25 miles southwest of Changsha. General Lin Piao's and General Liu Po Cheng's Communist forces based southeast of Ilunan are again on the move. Liu's armies are moving westward from the Kiangsi border into Hunan while Lin Piao's troops are attempting to eross the Mi River. The Cominunists in Soutliern Kiangsi are jiushing towards Wongyuan 120 miles northeast of Canton.