033.1100 Rogers, James H./41: Telegram
The Consul General at Shanghai ( Cunningham ) to the Secretary of State
[Received May 21—9:30 a.m.]
233. For Morgenthau from Rogers—also for attention George Peek.59 An apparently constructive move for inviting and securing foreign investment in China with possible later relief for deposit Chinese balance of international payments will be accomplished by incorporation this week of China Finance Development Corporation. Stock to be held exclusively by Chinese banks with joint control by these banks and Government.
[Page 386]All credits handled through corporation will be participated in by Chinese bank which will share responsibility and risk with foreign lenders.
Immediately corporation will tackle problem of railway and national debt adjustment and consolidation and railroad rehabilitation but it is expected by autumn or winter to invite foreign capital subscription to industrial and utility development.
Apparently this corporation should prove credit channel for sellers of equipment and materials as well as for export banks and other lenders. By requiring Chinese participation in each undertaking it should minimize political character of foreign investment.
Should resulting stimulus to capital import later prove great the danger of higher silver upsetting balance of payments and precipitating drain of silver from China would be correspondingly reduced.
This report is preliminary and confidential until incorporation. Fuller report will follow. At present I have no judgment as to its probable success. Rogers.
- President of the Export-Import Bank of Washington.↩