033.1190 Pierson, Warren Lee/4: Telegram

The Ambassador in China (Johnson) to the Secretary of State

164. Department’s April 3, 1 p.m. to Shanghai.

It happens that McNutt, High Commissioner at Manila, is likewise traveling on the President Hoover and since I have already determined to be in Shanghai in order to have a conversation with the High Commissioner it will be possible for me to see Pierson shortly after his arrival. It is perhaps a significant coincidence that K. C. Li of the Wah Chang Trading Corporation, New York, is likewise on the Hoover. I am reliably informed that the Minister of Finance is trying to persuade him to become Director of the Central Trust, an official agency for the handling of credit purchases by the Chinese Government.
Arnold and Calder, Commercial and Assistant Commercial Attachés, were in Nanking April 14 and 15 and I discussed with them and Peck54 the whole field of American economic enterprises in China, present and future, as affected by (1) unprecedented action of other countries principally Great Britain, Germany and France in extending long term credits for railway materials, (2) policy of the Chinese Government to monopolize and control certain lines of industry and trade and (3) the possible revival by the Chinese Government at any time of the demand made in 193455 for the negotiation of a new commercial treaty.
It was observed in these discussions that an era of economic development under National Government leadership has begun in China and that other nations already mentioned have recognized this fact. While the United States may not be under the same necessity as those nations to seek foreign markets for manufactures and therefore may [Page 582] not feel it urgent on this account to extend the same liberal credit, nevertheless, a proper regard for the future of our relations with China justifies a consideration of the question whether we should not participate more actively in this program of economic development. While we have led all nations in import and export trade with China for several years this has not included much of what the Chinese call “heavy industries” which may promise to become a more important factor in international commerce with China.
I have asked the Commercial Attachés to discuss with Pierson in Shanghai the general situation of American interests in China and I have invited him to meet me in Nanking at which time I shall consult with him.
Copy by courier to Peiping and Shanghai.
  1. Willys R. Peck, Counselor of Embassy in China at Nanking.
  2. See Foreign Relations, 1934, vol. iii, pp. 523 ff.