The Ambassador in France ( Bullitt ) to the Secretary of State
[Received July 26—1:50 p.m.]
1166. The Chinese Ambassador Wellington Koo called on Secretary Morgenthau10 this morning. In the course of the conversation which ensued at which I was present the Chinese Ambassador stated that although the morale of the Chinese Army and the civilian population was admirable the financial resources of China were becoming exhausted. It therefore was a matter of vital importance to the Chinese Government to obtain financial aid.
The negotiations for a loan in England had collapsed. The French had indicated their willingness to give a loan or credit provided Great Britain and the United States should give a loan or credit.
The Secretary of the Treasury stated to the Chinese Ambassador that while he could make no promises of any sort he felt that it might be advisable for the Chinese Government to send Mr. K. P. Chen,11 with whom he had negotiated in the past with pleasure, to the United States for the purpose of inquiring into the possibilities of obtaining a credit for the purchase of flour and grain goods.
The Secretary of the Treasury suggested also that if Mr. K. P. Chen should come to the United States he should inquire into the methods of purchasing now employed by the Chinese Government.
The Chinese Ambassador was most grateful for these suggestions and said that he would communicate with his Government immediately.