693.006/38: Telegram

The Ambassador in China ( Johnson ) to the Secretary of State

199. Young96 inquires whether Department is in position to express any views for his guidance as to attitude of American Government in case China should decide to curtail unessential imports in order to safeguard currency and economic situation and strengthen war effort. He considers it would be much preferable to utilize prohibitions in so far as properly applicable and to limit use of restrictive or prohibitive tariffs because (first) prohibitions less likely to become permanent trade barriers and (second) danger that tariffs would cause marking up internal prices and tend to initiate general price rise which so far has not gone far but might develop due to general conditions [Page 532] and increased note issue since last summer. He hopes American Government would not feel obliged to object on treaty or other grounds to imposition of certain temporary prohibitions if deemed necessary since acquiescence would be concrete manifestation of sympathy with China.

I may add that I feel that something of this kind is inevitable; that the suggested action seems least harmful of possible actions that might be taken. I hope that United States can take a sympathetic attitude under serious situation now facing Chinese Government.

Young says that he does not know that above steps will be taken. He has told no one of this inquiry.

  1. Arthur N. Young, American adviser to the Chinese Ministry of Finance.