893.515/1266
Memorandum by the Adviser on International Economic Affairs (Feis)
The Treasury gave me the following information:
“Under the arrangement with the Chinese Treasury of July 1937 the United States Treasury agreed to purchase Chinese yuan to an amount equivalent to 50 million dollars against a repurchase agreement. In order to give any necessary support to Chinese exchange to guarantee the United States Treasury against any failure to fulfill the contract the Chinese Treasury maintains 50 million dollars of gold with the Federal Reserve Bank of New York. On Wednesday, November 10, the Central Bank of China cabled through the Federal Reserve Bank of New York that in order to protect their exchange and under the agreement they were crediting us with 50 million yuan and requested us to place the equivalent dollar amount, roughly $15,000,000, to their credit. This credit was made and gold sufficient to cover it earmarked on the books of the Federal Reserve Bank. The Central Bank of China requested that $10,000,000 of this amount be paid to the Chase National Bank of New York for their credit.”