Memorandum by the Secretary of State of a Conversation With the Chinese Ambassador (C. T. Wang)

The Chinese Ambassador came in upon his own request. I first inquired about the general situation in China. He seemed not to have any particular information, more than what I already had. He then said that Chiang Kai-shek70 is relinquishing his position as head of the civil department of the Government in order to give his entire attention to military operations, and is placing Dr. H. H. Kung71 in charge of the civil affairs of the Chinese Government. The Ambassador next offered his personal view that Chiang Kai-shek should have taken this step six months ago.

I inquired as to when, in the opinion of the Ambassador, the Chinese Government would feel obliged to move from Hankow to Chungking. He replied that he did not think they would move from Hankow at all soon; that they would not move until and unless the [Page 520] capture of Hankow was more or less imminent. I then asked as to what the Japanese situation with respect to Hankow seemed to be. He said that the Japanese had not advanced farther in that direction than to a point not far above Wuhu and was showing no disposition at present to move ahead. I inquired whether he had any late information about conditions in Nanking, and he said that he did not.

I then inquired whether his Government is getting any supplies through French Indo-China, and he said he understood that a certain amount is being gotten across by making detours. I was not much impressed with the earnestness of this statement. I inquired what would be done with the locomotive being shipped from this country this week, and he replied that it would be shipped to Hong Kong; that it could not go across the narrow-gauge road in French Indo-China.

I inquired if the Ambassador knew what the Russian state of mind is with respect to the Chinese-Japanese situation. He said he had nothing new upon that subject. Another inquiry was whether in his judgment the internal troubles in Russia are creating a feeling on the part of all other nations that Russia would be correspondingly engrossed without any definite program relating to international foreign policy, especially in the Far East. To this he readily agreed.

The Ambassador then brought up the question he had in mind in coming to the Department today, and he proceeded to say that at the Brussels Conference some weeks ago72 Dr. Wellington Koo73 took up with the representatives of Britain, France, and the United States, the necessity for a loan from these three governments for China, of five hundred million dollars with which to purchase munitions, arms, and implements of war, and that the impression was left with Dr. Koo that the matter would be given further attention by this Government and presumably a more definite answer made than Mr. Norman Davis74 had given in Brussels. Before making reply to the Ambassador’s question, I inquired as to the amount and location of the gold and silver reserves of China. He was vague as to the amount. He said they had certain amounts in certain cities in China, also in London, in Hong Kong, and in the United States. I inquired then as to how long the Chinese Government could go forward on its own resources, incidentally citing the fact that it had proceeded already for six months. The Ambassador replied that it could probably go on another six months on its own resources, and he then proceeded to emphasize the view that it was important and [Page 521] necessary that the Government should look ahead and plan accordingly; hence the desirability and urgency to ascertain about the possibilities of the requested loan of five hundred million dollars. In that connection, I remarked that of course the Ambassador was thoroughly familiar with the fact that our entire market for arms, ammunition, and implements of war, is open in this country; that transportation is easily possible; that we are carrying forward our silver purchases from China; that the Export-Import Bank is discounting certain commercial paper for locomotives, etc. The Ambassador agreed with expressions of appreciation on behalf of his Government.

I then recurred to his inquiry, and said I was sure that he recalled the conversation which took place at Brussels, to the effect that Mr. Norman Davis had stated that only Congress could authorize a loan in any amount by the Government of the United States, while the British then or thereafter indicated that they were completely preoccupied at the time in producing armament supplies for themselves. I then said that there had been no developments with respect to this matter since the Brussels conversations; that I could not undertake to speak for Congress in regard to possible legislation authorizing a loan; that, in the circumstances, I would not be frank, as I always desired to be, if I offered any comment as to the situation beyond what was said at Brussels, except that this is a matter which comes under the authority and jurisdiction of Congress. The Ambassador indicated he understood this view, and then suggested that perhaps the President and the executive branch might have influence with Congress in carrying out a program such as he was proposing. I replied that in some and possibly many instances this would be true, but that the Congress itself is giving increasing attention to our foreign affairs and especially to conditions in the Pacific area, and that it would have definite opinions in regard to the question of a loan and hence would not be susceptible of influence by the opinions of the executive or other branches of the Government; that in any event I could not and would not, in justice to all concerned, undertake to comment as to the future in this connection but only stand on what has been said to the effect that the Congress alone has jurisdiction and must be looked to for the necessary legislation. The Ambassador sought to induce me to say that the matter was still under advisement and that there were possibilities of a different decision in the future. To this I again promptly brought him back to my statements which I have just recorded and I made the matter most definite by a further statement that I was not called upon to speak except as to the present; that I had spoken definitely as to the present; and that the future would have to take care of itself. The Ambassador did not seem at all surprised.

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With reference to the report of the Japanese Government’s peace terms to the Chinese Government, I remarked that, having been confined at my apartment with a severe cold for some days, I had not seen and conferred with the President in the meantime; that I was informed the Chinese Ambassador had had a conference with the President and, in order that there might be no crossing of wires, I might inquire whether the Chinese Ambassador had discussed the Japanese peace proposals in the presence of the President; if so, whether the President had offered any comment whatever relative to the merits of the reported peace proposals. The Ambassador replied without hesitation or equivocation that the peace proposals were brought up in his talk with the President, but that the President said not one word touching the merits or demerits of the peace proposals. I did not say to the Chinese Ambassador that my inquiry was due to the fact that a despatch from Johnson in China, repeating a report that had reached him, was to the effect that the President had in fact commented on the merits of the peace proposals and had indicated definitely to the Chinese Ambassador that the Chinese Government should view them as favorable proposals.75

C[ordell] H[ull]
  1. As President of the Chinese Executive Yuan (Premier).
  2. Chinese Minister of Finance.
  3. See Foreign Relations, 1937, vol. iv, pp. 155 ff.
  4. Chinese Ambassador in France.
  5. American delegate.
  6. See telegram No. 128, December 31, 1937, 2 p.m., from the Ambassador in China, Foreign Relations, 1937, vol. iii, p. 847.