893.51/6418
Memorandum by the President of the Export-Import Bank of Washington (Pierson)
On July 9 Minister Kung, accompanied by Ambassador Wang and Mr. K. C. Li, called upon Messrs. Jesse H. Jones and Warren Lee Pierson and presented the following statement:
The Chinese Government agrees to purchase from time to time on or before June 30, 1939, miscellaneous capital goods manufactured in the United States for export to China in an amount not exceeding $50,000,000 United States currency.
Payment for such goods will be by the delivery of promissory notes of the Chinese Minister of Finance against shipping documents in New York City. Such notes shall be endorsed by one of the Chinese Government banks and shall be payable in equal quarterly instalments over a period of five years beginning three months after date of shipment. Interest shall be at the rate of . . per cent.
In order to facilitate the transaction, the Export-Import Bank will undertake to purchase 50 per cent, of such notes without recourse to the American supplier, 25 per cent, to be purchased by Chinese banking institutions and the balance, 25 per cent., to be retained by the American shipper.
After a general discussion of the request for financial facilities for the purchase of American goods, Mr. Jones asked Dr. Kung and his associates to prepare an itemized list setting forth an outline of purchases the Chinese Government desired to make in the United States during the next two years.
[Page 613]Pursuant to the suggestion of Mr. Jones, the following statement was prepared by Dr. Kung and delivered to the bank on July 12:
[Here follows itemized list.]
After the conference held on July 9 Dr. Kung expressed the hope that the credit facilities outlined would be made available and that a favorable decision would be submitted to him prior to his departure from the United States on Wednesday, July 14.
It was further indicated during and after the conference mentioned that a favorable decision “in principle” would meet the present desires of the Chinese Government—actual transactions to be submitted from time to time to the Export-Import Bank for individual approval.