THE WHITE HOUSE 
     WASHINGTON
 
                         JANUARY 24, 1942
 
MEMORANDUM FOR THE PRESIDENT:
     RE: CHINESE SITUATION
 
     A number of incidents have contributed to worsen Chinese relations with Britain and the
United States recently.  These include (a) the confiscation of lend lease cargoes, (b) the reverses
in the Pacific,   the refusal to accept substantial aid from the Chinese in the defense of Burma, (d)
the small amount of ordinance and aircraft shipped to China, (e) the present closing of the Burma
Railroad to lend-lease shipments (because of troop movements), (f) the niggardly offer of financial
assistance by the British, and the misunderstanding of the nature of our offer.
 
     Against this background the fall of Rangoon, which appears likely, will probably set off a
wave of recrinimations.  I think we should be preparing some countermeasures now.  In addition
to urging theBritish to accept substantial Chinese military help, there are a number of things we
could do and which I am exploring:
     (A) The inclusion in the third lend lease bill of an appropriation of $500 million for the
assistance either explicitly of China or generally for countries whose war effort is being seriously
impaired by the difficulty of internal financing, to be granted under such terms and conditions as
you may prescribe.
     (B) The establishment of an air freight service from Calcutta to northern Burma and China
to maintain air and other operations in China,
       the construction of a road through Assam into northern Burma.
     I hope to have something on all these matters for your consideration next week,
                                   Lauchlin Currie