893.51/6598: Telegram

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

236. Department’s 8, January 6, 9 p.m. The Chinese Ambassador tells me that he has again approached the British authorities with a view to obtaining a loan of 20,000,000 pounds. In particular he has gone into the matter with Leith-Ross85 and offered as security mines in the southwest provinces which have the advantage of being [inaccessible?] to the Japanese. The Chinese Ambassador emphasized that if such a loan was not obtained China could not carry on with its currency much longer.

Leith-Ross states that he held out no hope to the Chinese of a loan but that he suggested that something might be done in the matter of arranging commercial credits for the mineral produce. At the moment Hong Kong is the point of export and Leith-Ross said that the Japanese might well interfere with such shipments but that it might prove practical to get certain ores out through Burma.

Mr. Quo Tai-chi also stated that the Japanese are now counterfeiting Chinese currency in order to bring it into disrepute and thus disorganize Chinese finances.

  1. Sir Frederick Leith-Koss, chief economic adviser to the British Government.