893.48/1050: Telegram
The Secretary of State to the Counselor of Embassy in China (Peck)
18. For the Ambassador. Shanghai’s 120, February 27, 4 p.m., last paragraph.
Background: Department has been given to understand that Chen is coming here on the invitation of the Secretary of the Treasury to give the Treasury information with regard to monetary matters; that the Chinese Government has given Chen an official passport but no official title; and that no publicity is to be given at either end.
Action: Referring expressly to the information given in Shanghai’s telegram under reference, Department feels, in the light of conversations with Reconstruction Finance Corporation officials, that interested Chinese officialdom should be discouraged from entertaining any expectation of reinstatement of canceled portion of cotton and [Page 468] wheat credit. Chen presumably will be permitted to raise any appropriate questions and make any appropriate inquiries which his Government may wish to authorize him to put forward, but Department feels it would be neither to this Government’s nor to the Chinese Government’s advantage for him to arrive here with any preconceived expectation of success in seeking loans or credits. Such questions as possible revision of schedules of payments on outstanding obligations may perhaps be susceptible of discussion.
Department desires that you discreetly communicate the substance of the above orally, informally and in friendly manner to Kung and that you suggest to him that these considerations should be fully understood by the Chinese official personnel most concerned.
You are authorized to do this yourself or through Peck or Gauss.
Telegraph Department when you have acted.