661.9331/24
Memorandum by the Minister in China (Johnson)92 of a Conversation With the American Treasury Representative in China (Buck)
I went this morning to see Dr. Buck who has just returned to Nanking. He informed me that he had come out at the direction of the Treasury Department to bring up to date his information in regard to financial and economic conditions in China and that he expected to be in China about a month but thought that he might extend this stay somewhat. He said that it was his purpose shortly to visit North China and Manchuria and later to go to South China, particularly to Canton.
I told Dr. Buck that the Department had instructed me in regard to his coming and that his appointment was to be confused in no way with the British suggestion for the stationing of an economic expert in China. I told him of my conversations recently with Dr. H. H. Kung and Mr. T. V. Soong and said that both gentlemen appear to continue to be interested in the possibilities of obtaining a loan from foreign countries. I said that T. V. Soong, for instance, had evinced a continued interest in the possibility of international financial assistance and had asked whether the American Treasury Department intended to send to China an economic expert such as the British were sending. I suggested to Dr. Buck that he might have to be on his guard in this connection in any conversations that he might have with T. V. Soong. I said that I saw no objections whatever to his discussing conditions in China, for such discussions would be necessary to elicit the kind of facts he wanted, but that I thought he must be [Page 581] careful not to say anything that might be interpreted by T. V. Soong or anyone else as committing himself to any proposal that they might wish to discuss. I thought that he should listen to any proposal that might come to him and undertake to communicate it by due and proper channels to Washington and that this would be the time when he and I would have to get together and cooperate. I told him that I would be glad at any time to assist him and that he would be able to communicate with me through any of the consulates that he might have contact with during his travels. I told him that for my part, although I could not prove this assertion, I could not rid myself of the feeling that in the cases of T. V. Soong and H. H. Kung they were too deeply interested personally in the real estate situation in Shanghai to be able to give unbiased consideration to the national problem with which China was faced.
Dr. Buck agreed with this and commented on the fact that the Chinese appeared to be extremely timid about the whole matter. I stated that it was extremely difficult for me to understand why, when I knew that the Government was able to borrow money domestically for administrative and military purposes, it was not able to adopt some currency policy and borrow domestically the money necessary to put such a currency policy into operation. I said that I thought this was the fundamental reason why it was so difficult for the foreign Powers to do anything. Unable to help themselves, the Chinese were apparently concentrating upon help from the outside. I could see no chance of help from the outside when the Chinese lacked the confidence in themselves necessary to the adoption and putting into effect of some plan. I said that the mere adoption and putting into effect of a plan would do more to make it possible for help from the outside to be brought in than anything I knew. I pointed out that up until the Chinese took control of the three Chinese banks of issue at Shanghai and put them under the supervision of the Central Bank the Chinese Government had not really had control over any appreciable amount of silver. I said that I felt that the Government was now in a position, with actual silver in its pocket, to start some plan that would bring outside financial aid to its help.
I pointed out that I had attempted, in conversing with the Chinese on this subject of silver and the policy of the United States Government in regard to silver, to make it clear that the United States, like all other Western countries, was deeply involved in a problem of domestic currency reform and that it was difficult for me to believe that the Chinese could expect any change in the American Government’s policy, which, after all, was dictated by the Congress and not by the Administration, until the domestic problem had been solved or natural economic causes had asserted themselves and forced a change.
- Copy transmitted to the Department by the Minister in China in his despatch No. 3596, June 4; received June 9.↩