893.515/563: Telegram
The Minister in China (Johnson) to the Secretary of State
[Received May 15—6:58 a.m.]
103. Reference my telegram No. 41, February 27, noon, and paragraph 1 of Department’s telegram No. 80, March 18, 7 p.m., I have received letter from Kung which, after referring to arrangement described in Department’s telegram, states:
“In accordance with this arrangement the Central Bank of China has duly delivered 14,250,000 ounces, this quantity having been purchased in London. However, the sudden and considerable increase in the price of silver in the last few weeks means that the requisite quantity can not [be] purchased abroad and delivered except at a prohibitive cost; and the monetary situation in China continues to be so delicate that for the present it is entirely impracticable to consider exportation of silver from China.
In these circumstances I should greatly appreciate if you would inquire by telegraph whether the Treasury, in order to meet this special situation, would be willing either to cancel the balance of the contract, or, if for any reason that is impracticable, to accord to China the right of further postponing delivery.”