893.51/6643: Telegram

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

623. Embassy’s 551, June 23, 6 p.m. I had a conversation with Halifax3 today at his request. The British are considering a loan up to $100,000,000 to the Chinese for the support of currency. He asked me whether I thought the United States would join in this and I said of course I had no way of knowing what the Government would do. He asked me my personal opinion and I told him I thought it was extremely unlikely.

I asked him how he was going to reconcile the position of supporting currency for the Chinese and backing a nonintervention committee in Spain4 and also advising the Japanese that this loan was only to [Page 536] help currency and not meant as a hostile gesture to the Japanese. He told me that he did not think the Spanish policy was at all contrary to the policy already set out, on which they were on record as supporting, that everything should be done that could be done to help the Chinese. He said that the Japanese had already approached the British with the idea of joint guardianship of the Chinese financial status, but the British were unwilling to participate.

Frankly, however, he is very worried about the Japanese situation and the prospect of a situation arising in Hong Kong which would be another sore spot and might mean trouble—even worse than the present Spanish bombings.

I asked him what he had actually called me over there for and he said to get my personal reactions rather than the Government’s reactions. He said that he is in the toughest spot he has been in to advise the Cabinet on this particular question because he is convinced that unless the British do something on currency the Chinese will go bad financially and that the party will be over as far as the Japanese are concerned. If on the other hand the Chinese get some help for their currency they would go along for a year and at that time a better settlement all around could be made.

I am sending this on to you for your information because I am convinced that Halifax did me the honor of trying to get my personal reactions on the problem rather than as Ambassador, but if there is anything further you want me to do on it, please advise.

Halifax is of the opinion that things have eased up over here considerably but, as I went out the door, he said “I feel that I am such a bad prophet that anything can happen any time and show up the British. I know nothing about what is going on”.

  1. Viscount Halifax, British Secretary of State for Foreign Affairs.
  2. For correspondence regarding the Spanish Civil War, see vol. i, pp. 149 ff.