811.515 Silver/28
The Chinese Minister (Sze) to the Secretary of State
My Dear Mr. Secretary: I beg to inform you that I have received a cablegram from Dr. H. H. Kung, Minister of Finance at Nanking, with the request that it be communicated to you. It reads as follows:
The message of September 22 received today through the American Consulate is understood to have been delayed by mutilations which necessitate several repetitions.28 Please at once reply that China is gratified that the American Government recognizes the unfortunate [Page 446] effects excessive price of silver would have and would appreciate the earliest practicable reply to our telegram of September 2329 in order to assist China in deciding on a policy to meet a potentially serious monetary situation resulting from the present rise in price and drain of silver. American cooperation to prevent further rise in the price of silver and to maintain stability as contemplated in the London Agreement is particularly vital to China. In this connection it may be pointed out that the rise of silver discourages the export of commodities and thereby impairs China’s purchasing power for imports. Also a reply is desired to our inquiry regarding the exchange of silver for gold. With respect to discouraging the export of silver from China it may be explained that this condition results largely from artificial stimulation of the price of silver abroad and that restrictive measures would create difficulty here which the Government has striven to avoid particularly because restrictions would probably create severe breaks in exchange detrimental to trade and, it is feared, would aggravate the present difficulty in the local financial market. Could not the American Government for the present restrict its purchases to silver already in America to avoid further promoting the drain from China?
I am [etc.]