893.515/813: Telegram
The Ambassador in China (Johnson) to the Secretary of State
[Received November 2—11:30 a.m.]
Arthur Young informed me today that Chinese Government was about to decide to make a unit of principal banks of issue and to take over all silver. He [asked] what attitude American banks would take. I told him I could not tell nor was I in a position to advise them. I suggested that he approach banks directly which he will do on behalf of Ministry of Finance. He said Hong Kong & Shanghai Bank was prepared to cooperate by turning over its silver holdings against Central Bank notes on advice of Leith-Ross, that an Order in Council is in process of preparation to enable it to cooperate in above described way.
This would of course mean that the Chinese Government would take over all silver reserves now held by private Chinese banks and such foreign banks as will voluntarily cooperate. Young said Chinese Government’s decision would be made in next 3 or 4 days.