George F. Kennan on the Strategic Background

General Marshall had first met Kennan in 1944. A man with extensive experience in Soviet affairs, Kennan sent the State Department a “Long Telegram” from Moscow on February 22, 1946, summarizing Soviet- American relations and the Soviet threat; it had considerable impact upon those in the government who read it. In early 1947, Marshall decided to reorganize that part of the State Department that controlled information and communications flow and to initiate a “think tank” called the Policy Planning Staff to consider what issues might become important foreign policy issues. Kennan began his new job in May 1947, about the time the socio-economic crises in Europe had become the key issue for the United States. This document is addressed to Kennan’s friend, Charles E. Bohlen, another expert on the U.S.S.R., who was then Counselor of the State Department. The original is in the State Department records (Record Group 59 [Records of Charles E. Bohlen, Box 6]) at the U.S. National Archives and Records Administration, College Park, Maryland. In the document below, material in brackets has been added by the editor (Larry Bland).


January 30, 1948

I wrote it because I was continually being needled by people for some sort of a statement on the political-strategic background of the Marshall Plan, and figured I might as well reduce it to paper. It could use a final section to top it off, but I don’t know that there is any use in putting more time on it unless some specific use for it arises.

I have made no other disposition of it, except that the section on China is being embodied in a draft of a suggested statement to be made by the Secretary before an executive section of certain congressional committees in connection with the China aid program. Butterworth’s office [W. Walton Butterworth was Director, Office of Far Eastern Affairs] was instructed by the Secretary to produce such a draft in accordance with such basic concepts as I might outline to them. This order was given at a conference which the Secretary called in his office on the day when you were in Philadelphia. I am suggesting to Butterworth that copies of the two draft statements (one for an executive session and one for an open session) be shown to you.

George F. Kennan

THE POLITICAL STRATEGIC BACKGROUND
OF U.S. AID PROGRAMS

(February 1948)

I. THE BASIC PROBLEM

1. When World War II came to an end, there were many constructive enterprises to which the U.S. Government wished to proceed in international affairs.
It hoped to create a world order in which it would be possible for individual countries to help each other to a far greater degree than was previously possible in the solution of their individual and common problem. It wished to see established a real international security system, under the protecting framework of which international trade and all sorts of international exchange could be developed on a healthy basis.
This sounds like a broad and general pattern; but in practical application it involved the constructive solution of thousands of detailed problems of international life.

2. In trying to get ahead with this program, our Government found itself blocked primarily by the inability of the allies to reach agreement on the terms of treaties of peace with the major axis countries: Germany and Japan.
The allies have not been able to agree on the terms of these treaties because Russia was not really agreed with the others as to what ought to be the political future of these countries themselves and of the wider areas of which, in the past, they have been important economic and political centers.

3. The defeat of Germany and Japan created power vacuums in those countries and surrounding areas.
The smashing of German and Japanese political and military power left a great gap in the areas of international life where that power has asserted itself before. The other allies have been unable to agree with Russia on peace treaties because they have been unable to agree how these gaps should be filled. We have felt that they should be filled by the growth of new and liberalized political regimes in Germany and Japan, which countries would remain demilitarized and under close allied supervision but would otherwise enjoy complete national independence. The Russians wish to see new regimes emerge which would be dominated by communists of the Moscow persuasion or by other elements subservient to Moscow. This would give the Kremlin effective control over the military and industrial strength of these countries. And it would help them to control surrounding areas as well.

4. For this effort to achieve indirect domination over Germany and Japan is only part of a larger program of the Moscow communists, which looks toward the establishment in a similar domination over every other country in Europe and Asia.
This program would eventually make the Kremlin by all odds the strongest and most influential factor in world affairs. But the problems of Germany and Japan are particularly important in the international pattern because
a. these two countries have the greatest military industrial potential of any countries after the U.S. and Russia, and
b. these are the two countries about which we and the Russians have to reach some formal agreement because we were allied against them in the recent war and defeated them?]theoretically, at least?]by our common effort.

5. It is unlikely that the Russians will try to gain the objectives mentioned above by military conquest.
In the first place, the type of influence they wish to gain in other countries can be better acquired by other means than direct military conquest. Secondly, to attempt military conquest at this time might embroil Russia in a war with us. In present circumstances, the Russians could have no certainty that such a war would not end disastrously for them. Even if there were no such thing as the atomic bomb, they could have no reasonable certainty of the outcome of such a war unless they had already filled the power vacuum in western Europe and probably in Japan as well. And they would not only have to have filled this vacuum; but they would also have to have consolidated their control in those countries and to have restored the German and Japanese economic and military power, now shattered by the war. In other words, Soviet military power could not be used directly to gain control of Germany, Japan, and other countries of Europe and Asia by direct conquest, except at the risk of war with us. But if such control could be gained by other means, then Russia’s possibilities for surviving and winning an eventual military conflict with us would be much greater.

6. Thus, the Soviet effort to fill these power vacuums is not primarily a military effort.
It is aggression, if you will. But it is not horizontal aggression, accomplished by the movement of armed forces laterally over frontiers. It is vertical aggression, accomplished by the use of forces within the victim countries?]communist parties and others?]who rise up to seize control in those countries and to exercise it on behalf of the international communist movement. This technique, namely the use of factions within a country to gain control over that country, is referred to by various names. When Hitler used it, it was called the technique of “infiltration and penetration”. It can, perhaps, best be described as indirect aggression.

7. Just because the emphasis of Soviet policy lies on indirect aggression, this does not mean that military forces have no important part to play.
We all know that the existence of a military force can have an important influence on international affairs, even when that force is not being used. The military forces of the great powers cast their shadows over the processes of international life in times of peace; and the course of events is sometimes deeply influenced by the shape and intensity of these shadows. People can be restrained by them or encouraged by them, depending on what they think they mean. The mere existence, for example, of a reasonably strong armed establishment in this country causes many European communists, seeking power in their own countries, to be more restrained than they would otherwise be, for fear that they might do something which would tend to draw our armed establishment back into Europe. Thus, we cannot say that, just because the Russians are probably not planning to gain their objectives by military conquest, this is any reason why we do not need armed forces.

8. We also cannot rule out the possibility that military complications may develop, in spite of everything.
While the Russians do not wish to become involved in a war with us, they are determined to go as far as they can, short of such involvement. It is in their nature to try to calculate this line very nicely and to come as close to it as they possibly can without overstepping it. This is why there is often less chance of military complications when we state our position frankly at the outset in an international problem and adhere to it firmly from the start, than when we yield and temporize in the hopes of appeasing someone and reaching a compromise. If we make the line clear, people are not apt to overstep it. But if we show ourselves too yielding, we may mislead other people as to the real limits beyond which we cannot, in the interest of our own security, permit them to go. And in this way, we encourage them to make the very miscalculation which is the most dangerous for the preservation of peace.

9. It is not only through this miscalculation that military developments could ensue.
We all know that the Russians have already set up an elaborate political structure of satellite states in Eastern and Central Europe and Northern Asia. In doing this, they have established their power over approximately 150 million people?]nearly as many again as they have in the whole Soviet Union. They have exercised this power, in most cases, brutally, cynically, and with little regard for the national pride of the subject peoples. In doing this, they have been playing with fire. They have antagonized many people and made many bitter enemies. If their political structure should ever begin to collapse on them, things might go very much faster than anyone expected, and they might find themselves suddenly stampeded into using direct military force in ways that could very easily lead to international complications.

10. Therefore, just because the Russians do not expect to use armed force as the direct means of accomplishing their objectives, we must not conclude that international complications are out of the question, and we must be ready for all contingencies.

11. But we must remember that the Kremlin is placing its main reliance on the technique of indirect aggression as a means of filling the existing power vacuums.
That is the principle problem we are facing; and it is primarily to the solution of that problem that our diplomacy today must be addressed.

II. WHY OPPOSE RUSSIA’S INDIRECT AGGRESSION?

Before examining the means by which we may hope to counter Russian efforts at indirect aggression, it would be well to have a clearer idea of what we expect to prevent, and what we expect to gain, by countering those efforts.

1. We have already seen that if Russia were to gain control over the military-industrial potential of Germany and Japan, the Kremlin would be by far the greatest economic and military power in the world.
This would be particularly dangerous for us because we have no reason to expect that the Kremlin would exercise this power with any restraint or with any degree of tolerance toward us or our institutions. There is nothing either in Russian historical tradition or in Soviet ideology which would justify us in expecting them to do this. If Russia came to control Europe and Asia, this control could be founded only on communist dictatorships maintained against the will of the majorities of the peoples. The mere existence of a great free country like our own, to which anti-Soviet forces could gravitate, would then be a major danger (even more than it is today) to the security of the Soviet political structure. For this reason, the Russians would inevitably focus the full force of their economic and military power upon the destruction of our society, with a view to establishing here a regime subservient to themselves which would make no further trouble for them. They would hope that in this way the conscience of the world could be finally silenced.

2. But even if Soviet power could not be extended to this Hemisphere, our position would deteriorate immensely if the Russians were to keep their control over Asia and Europe.
The standards of international behavior which permit a democracy like our own to enjoy profitable associations with other nations are all ones which are challenged and repudiated by the Moscow Communists. Wherever their power extends, these standards begin to crumble and to be replaced by forms of international association which resemble more the relations between enemies than the relations between friends. Wherever this happens, it becomes impossible for individuals in our country to take any part in international associations: everything has to be done by governments, and every governmental act in the international field then becomes motivated by political purpose. All forms of international intercourse become only part of a sly game through which each country seeks to strengthen itself and to bring deadly injury to the other. If the climate of international affairs were to be dominated by this system, our country would be compelled to change many of its internal institutions to fit the necessity of international intercourse.

3. If Russian power were to become dominant in Europe and Asia we would not be able to count on any of the resources of those continents (and possibly of Africa) for the satisfaction of our economic needs, particularly in war time.
This would be a serious matter. There are 22 critical materials in which we cannot satisfy our normal peace time needs from the resources of the Western Hemisphere. In time of military emergency, this number would rise to 26, for our demands would then be larger. To replace many of these materials by substitutes or synthetic productions would be costly and time-consuming. Communist domination in other continents would probably not mean that all trade in these commodities would be immediately stopped or always forbidden. But it would mean that they would be released to us only when, and in so far as, Soviet purposes might be served thereby. We could therefore count on no certainty or stability of supply, and would have to reckon that materials might be denied to us at critical junctures for the very purpose of injuring our economy.

Direct considerations of national defense also enter into these calculations.
If this nation were ever to be forced into hostilities with the Soviet Union, our ultimate security would probably lie in our ability to take the offensive and to inflict damage within the heart-land of Soviet power, which is Russia. To do this it would probably be essential for us to have certain bases of operation on the Eurasian Land mass and in Africa. If the respective territories came now under indirect Soviet control, these bases would be denied to us at the outset. We might then have no effective means of striking back at Russia or of reducing Soviet power in time of war.

5. It is to avert such developments and to keep large areas of Europe, Asia, and Africa in hands at least tolerant of our national existence that we are opposing Soviet aggression.
This does not mean that we expect, or hope, that all the governments we are helping to resist Soviet pressure will be friendly or grateful to us. Friendship and gratitude are not common in international affairs.
This also does not mean that all the governments we help to resist Soviet pressure will be enlightened, liberal governments, practicing democracy in ways which our people would find commendable. Many of these governments may be corrupt or dictatorial. But they will be preferable, from the standpoint of American interests, to communist-dominated regimes; for they will not be aspiring to world domination, nor would they have the resources to permit them to dream of large-scale aggression.

6. If we are successful in opposing Russian expansionist aims, our relations with Russia will probably improve.
This is because the Russians will then be compelled to negotiate with us in order to try to protect what they have and to achieve their further objectives. As long as they have reason to hope that they may achieve their objectives in spite of us and in the face of our opposition, they will not be disposed to deal with us in any satisfactory manner at the council table, whether with relation to the peace treaties or in any other connection. If, however, they find that they cannot bend further areas of Europe and Asia to their will by methods of indirect aggression, then they will have to reckon with us and our wishes. It will then be possible to treat with them more successfully on the terms of the peace treaties.

7. Successful opposition to Soviet expansionism will thus not increase the danger of war. We have already seen that unless the communists can gain control over the industrial machines of Germany and Japan, they would not be at an advantage in a military encounter with us. They would therefore not be disposed to seek such an encounter if they have failed to fill the power vacuums left by the outcome of the recent war. Furthermore, their psychology is not such as to cause them to feel irritation with us over their failure or to cause them to act hastily or foolishly as a consequence of it. Nothing we can do would cause them to like us or to treat us with confidence. But successful opposition on our part to their efforts at indirect aggression would cause them to have greater respect for us. And the more they respect us, the easier it will be for us to do business with them.

8. Thus the successful repulse of Soviet efforts at indirect aggression is a prerequisite to the conclusion of peace treaties and to the negotiation of any sort of practical political settlement with Russia.
If the initial aims of ERP, for example, could be successfully realized, it should be possible to resume at an early date the discussions concerning a German peace treaty.

9. Conversely, if Soviet expansionist efforts are not repulsed, we cannot expect to reach a point where we can successfully negotiate with Moscow.
On the contrary, we would then run the risk that the Russians might be carried by the momentum of their action to a point which would be clearly inconsistent with our national security and which would make war inevitable.

III. HOW CAN INDIRECT AGGRESSION BE THWARTED?

1. It would be difficult to employ regular United States military forces effectively to combat indirect aggression.
The forces through which indirect aggression is conducted are for the most part nationals of the victim state. Sometimes they are very numerous and make up a sizeable proportion of the population. They are mostly civilians. The tactics followed by their leaders usually verge on civil disobedience and violence in the face of established authority. If they remain this side of that line, they remain within the sphere of legitimate internal political opposition. If they over-step it, they enter the sphere of insurrection and civil war.
In either case, a foreign army cannot move in to oppose them without seeming to be guilty of armed intervention or actual military aggression. And even if it does move in, it finds no one to oppose but civilians, some armed and some unarmed.
This is an unsatisfactory task for any commander; and cannot fail to lead to confusion, misunderstanding, and popular resentment against the foreign troops.

2. Our democratic institutions make it difficult for us to combat indirect aggression by the same means which the communists use in pursuing it.
Our informational machine is weak and rudimentary compared to that of the communists. We are unable to use propaganda with the cynical freedom that the communists use it, because we have respect for the truth. We are unable to run militant political movements in other countries through concealed agents, because we do not believe in that kind of intrigue. We cannot intimidate people, as the communists do, with the fear that some day we may rule over them; for we do not deal in terrorism.

3. We recognize that in opposing indirect aggression, the main burden must be borne by the peoples under attack.
The communists never obtain majorities. They are, therefore, unable to seize power in any country where the mass of the people remain confident of their ability to keep the communists out of power, and determined to do so. They do succeed in countries where they are able to create panic and confusion and to persuade people that they are going to take power in spite of the will of the majority. The main problem, therefore, in the combatting of indirect aggression, is the problem of preserving morals and confidence among the people being attacked.

4. Economic conditions therefore affect the vulnerability of peoples to indirect aggression if they cause insecurity, panic, and despair.
In this respect, what is important is not the absolute standard of living, but the standard people are used to. When this is seriously threatened, and when they see no means of extricating themselves from economic difficulties, they then tend to conclude that they have no stake in the preservation of their political independence. They will then often accept communism in the belief that they have no real alternative.

5. But it is essential that economic assistance be granted in such a way as to give the necessary psychological lift to the peoples in question.
If assistance is given too inconspicuously or too slowly or too grudgingly, its effect as a morale booster can be destroyed. In this case, while it can still have some economic effect, its political effect is zero, or worse.

6. Even the economic effect of foreign aid can be drastically affected by the psychological and political framework in which that aid is extended.
In most cases, foreign aid can only represent a marginal quantity, as compared with the economic effort of the receiving people themselves. Their own economic effort may vary, according to their subjective psychological attitude, by a large factor. This area of fluctuation is usually several times greater in quantitative measurement than the foreign aid itself. Therefore, aid granted ineptly or ineffectively from the psychological standpoint can negate its own effect and actually worsen the resultant economic picture by reducing the will of the recipient people to work for themselves. Conversely, aid granted to good psychological effect can more than double its own value by the stimulus it gives to production in the receiving country.

7. Economic aid happens to be a weapon in which we still have the superiority.
Our economic potential has been increased during the war and in operating at levels never before reached by ourselves in peacetime or even approached by any other people. The Russians are traditionally a backward nation. The Soviet regime has never restored the regular export surpluses they had before the Revolution. And their economy is still recovering from the damage of the war.

8. It is, therefore, logical that economic aid should be our principal weapon in countering communist expansionism; but it is essential that it be utilized with primary emphasis on its political and psychological, as distinct from its purely economic, effect.

IV. PRIORITIES IN U.S. AID

1. U.S. resources are clearly inadequate to provide all the aid requested of this country, or even all that we might find it in our interests to grant.

2. It is therefore necessary that these resources be employed with the maximum economy, from the political standpoint; that is, where they will produce the most important returns in terms of the advancement of U.S. interests.

3. In the employment of economic aid as a weapon of policy, a number of factors have to be considered.
Among these, the most important are:
a. The significance of the area in question from an over?]all political and strategic standpoint;
b. The danger which would result from our failure to extend aid;
c. The extent to which the area has the latent ability to match our aid by self-help in both the economic and political sense; and
d. The cost in terms of aid required as measured against the possible benefits to U.S. national interests.

4. Measuring Western Europe by this yardstick we find the following:
a. The Western European area is of primary and unexcelled importance both politically and strategically.
Western Europe possesses an industrial and military potential greater than that of any integrated economic area in the world outside of this country. With the U.S. it is the most important center of political and cultural influence in the world. The views of its component countries on the conduct of relations between states are generally similar to our own; and its institutions, by and large, serve to buttress those of our own country. Its peoples have a solid interest in the continued prosperity of the U.S. as a world power, for they must look to us for protection and for the necessary stability of world environment.
b. If the Western European nations were to fall under the domination of elements unfriendly to us, this country would have lost the only major aggregate of power and opinion abroad which has a stake in our own endurance as a world power.
This would constitute a development which would negate the fruits of our victory in the recent war. It would create a situation no more favorable to U.S. interests than that which would have existed if Hitler had won the war. It would probably bring Russian military power to the shores of the Atlantic and thus threaten the security of the Atlantic community. It would drive Britain into a political compromise with Russia which would effectively cancel out whatever international influence the British might otherwise have. It would wreck prospects for a general favorable development of world trade. It would create serious marketing problems for a number of countries in this Hemisphere. The measures of increased defense, both military and economic, which would be thereby forced upon this country, would call for the establishment here of extensive internal controls of a permanent character, approaching those which we have had in war time. In general, our entire approach to international affairs would have to be basically altered to enable us to deal successfully with the type of world which would result from such a change.
c. Western Europe is the center of an advanced and traditionally vigorous civilization.
Certain of its peoples are today weakened by the blood-letting of two world wars and by other causes. It faces certain long-term problems of economic re-adjustment which cannot be basically remedied by any short-term aid program such as that now contemplated, but which cannot even be successfully attacked unless such aid has first been extended. By and large, the people of Western Europe are as vigorous, as hard-working, and as skilled technically as any in the world. They also have deep attachment to their national traditions and independence, as well as to the community of concepts which have built up European civilization as a whole. There is no reason to doubt that if they could be guided over the worst of the special maladjustments arising out of the war and its aftermath, they could relatively easily develop again the capacity to look after themselves both economically and politically.
This will be particularly true if it proves possible to develop among them an increased sense of their community of interest and of mutual obligation with respect to economic development and political defense. The initial U.S. suggestions, from which the present aid program took its origin, were designed to promote this sort of unity among the Western European nations. Their effect in doing so was striking; and the mere effort of the 16 countries to join in drafting a recovery program proved more successful in combatting communist penetration in Western Europe than anything which had occurred since the war.
This reinforces the probability that if aid could be granted to those countries in a manner well designed to achieve a favorable political effect, these countries could easily be brought to a point where they would be able to handle the problem of communist penetration without further outside assistance.
d. It is clear from the above that the objectives which we stand to gain by a successful aid effort directed toward Western Europe are ones comparable, in their importance to this country, to the objectives of a major military effort. The cost, on the other hand, is far less than that of even a relatively minor military effort, and not even enough to maintain our exports at their recent level.

5. Applying this same yardstick to Greece, which is our major aid objective in the Middle East, we find the following:
a. The defense of Greece against communist aggression is an integral part of the defense of the Middle East.
This is true both politically and strategically. The significance of the area, therefore, from a political and strategic standpoint, must be measured by the significance of the area to which it is vital.
b. If Greece were to fall into communist hands, it is not likely that Turkey and Iran could long remain immune to similar communist penetration and domination.
Once this had occurred, the Kremlin would have highly favorable positions for the exercise of influence over the entire Arab world. This would probably result in the denial to us and to the British not only of the oil of that area, but also of its strategic facilities. These strategic facilities might well be of primary importance to us should we ever become involved in a major military conflict with a Eurasian power.
Finally, the political domination of the Middle East by the Russians would doubtless lead to the elimination of Britain’s political positions in that area and to the further reduction of her influence as a world power. This would increase our problems in the Atlantic area.
c. Greece being a pivotal point in the communist efforts toward the political conquest of the Middle East, the stakes of the political struggle there are great.
The forces involved, on the other hand, are surprisingly small. The guerillas are now said to number only approximately 20,300. The total economic and political aid program for Greece is of minor cost compared to the strategic considerations involved, when the latter are reduced to approximate financial values.

6. Applying this same yardstick to China, we find the following:
a. China is the most important single cultural and political center in the Far East. Developments in China undoubtedly affect political tendencies throughout the entire Far Eastern area. The Chinese people unquestionably represent one of the great spiritual forces of the world.
At the same time, China does not herself possess the industrial potential which would enable her to become a first-class military power within our time. Nor is there any likelihood, in view of social and demographic conditions in China, that the country could be so organized by any ruler as to be able to command and combine into a dangerous unit the resources of other countries in the Far Eastern and Pacific area.
There is no other country in Asia, except possibly Japan, which could conceivably supply China in the coming period with the economic values necessary to make up the gaps in China’s own resources.
China is at present in the midst of a general social and political revolution, necessary to its transition from feudalism to a modern industrial society. Until this revolution is completed (and it will take a long time) there is no prospect that sufficient stability and order can be introduced into Chinese society to permit of a strong and disciplined national development.
b. In view of the above, a further diminution of resistance to communist forces in China would not appear to prejudice seriously the national security of this country.
In the first place, it is not probable that the communists could succeed in establishing their authority over all of China at any early date without injuring the discipline and integrity of their own movement. They are today ill-equipped, from the standpoint of personnel, to take over the great cities of China or to bear the new responsibilities which they would assume if they were to extend their rule to the central and southern portions of that country. They could not acquire that personnel rapidly without taking in masses of untrained or poorly trained people, foreign to their methods and ideology.
Moreover, it is not certain that the Russians would wish to see the present Chinese communist regime extend its power over all of China. Russian interests and instincts would cause them to prefer the existence in China of at least two or three separate authorities, all susceptible of being played off against each other, and all susceptible to Soviet influence.
But even assuming that the Chinese communists were able, and encouraged by Moscow, to take over all of China, it is still difficult to see how they could seriously threaten the U.S. in a military sense. Our security cannot be essentially affected by the development of land power in Asia unaccompanied by very strong sea power and air power. There is no prospect that China could develop strong sea power and air power even under communist domination, in our time; nor could China make any serious contributions to the development of Russian power in the Far East, except from the areas which are already for the most part in communist hands.
Thus while there can be no precise certainty about these matters, there is no reason to believe that a collapse of resistance to the communists in China would present this country with consequences anywhere near as serious as those which would be presented by a communist conquest of Western Europe.
c. The character of internal developments in China makes it unlikely that any amount of American aid of an economic or military nature could render the Chinese Central Government able to cope successfully with the task of reestablishing and then maintaining its rule throughout all of China.
The issues in China are thoroughly confused. The Chinese communists have succeeded in identifying themselves to a considerable extent with certain deeper and important popular aspirations which are bound to affect the future course of events. There is no reason to assume that the present Central Government, with its ideology and its methods, could satisfy all of these aspirations or create a social order which would satisfy the great mass of Chinese everywhere, including Manchuria, and rule out further violence and civil disobedience. At present, the regime is weak and lacking in discipline and inspiration. There is no evidence that these conditions will be drastically corrected by foreign aid. In these circumstances, any large-scale and determined U.S. effort to assist the Chinese Government to oppose the communists would probably degenerate into a direct American undertaking and responsibility, involving the commitment of sizeable forces and resources over an indefinite period.
d. In these circumstances the costs of an all-out effort to see communist forces resisted and destroyed in China would clearly be out of all proportion to the results to be obtained.
On the other hand, we are already committed by past actions and by popular sentiment among our people to continue to do what we can to relieve suffering in China and to give the Chinese Government the possibility of working out its problems in its own way. It would not be in U.S. interest to demonstrate lack of confidence in the Central Government or to add in any way to its difficulties. In these circumstances, the continuation of a moderate continued program of economic assistance, extended in full cognizance and recognition of all the unfavorable factors in the Chinese situation and designed to mitigate suffering and to give continued expression to the sincere American concern for the welfare of the Chinese people, is warranted by American interests.

7. The above analysis will demonstrate clearly that there are decisive differences, as between various geographic areas in the factors determining the desirability or undesirability of extension of U.S. aid.
This means that policy followed in one area in these matters cannot be held a precedent for policy followed in any other area, except to the extent that the governing factors are similar. And even within this area where similar governing factors prevail, it may be necessary for this Government to sacrifice one objective in favor of another, on grounds of sheer economy, where resources are not sufficient to go around.