893.51/6564: Telegram

The Secretary of State to the Ambassador in the United Kingdom ( Kennedy )

8. The British Ambassador76 has informed the Department today that his Government had advised him that the Chinese Ambassador in London,77 in talking with the Secretary for Foreign Affairs78 last Monday, had said the Chinese Government was negotiating with the United States Government for a loan of 125 million dollars for 10 years at 3 percent and to be issued at 90; and that yesterday he told the British Foreign Office that an agreement had been signed in Washington for a loan of 150 million dollars, but that he could not definitely say whether the United States Government were concerned or not.

There is no foundation for this report as far as the American Government is concerned, and the Department has no knowledge of any loan arrangement with private parties. The Department is so informing Sir Ronald Lindsay.

[Page 523]

In his most recent talk with the Chinese Ambassador in Washington on this subject, the Secretary of State, while pointing out the constant purchases of Chinese silver by the American Tresaury, had made clear that any government loan would require the passage of legislation.

If Butterworth79 should be questioned about the report by the British Treasury, he may state that no such loan transaction is under discussion with this Government.

  1. Sir Ronald C. Lindsay.
  2. Quo Tai-chi.
  3. Anthony Eden.
  4. William W. Butterworth, Second Secretary of Embassy in the United Kingdom.