893.51/6673½

The Ambassador in France ( Bullitt ) to President Roosevelt 18

Dear Mr. President: From a multitude of reliable sources, I have been informed during the past two months that the Chinese will be at the end of their financial resources by the first of next January, unless they can obtain credits abroad. Chiang Kai-shek’s will to fight and the courage of the Chinese people remain unbroken; but there will be just no money to buy anything. I have had this information in a series of messages from Chiang Kai-shek, T. V. Soong, and Doctor Kung transmitted to me by the Chinese Ambassador here, and I have had the same information from a horde of detached observers.

As you will recall, some months ago Bonnet said to me that he hoped it might be possible for the United States to extend some sort of a credit or loan to China and that he was certain that if we should be willing to act, both France and Great Britain would act simultaneously though not jointly. Two days ago, Bonnet reiterated this to me. He added that he was certain that either England, France, or the United States could give credits to China without provoking any serious Japanese reaction. The Japanese were too involved in China and were too fearful of Russian attack to dare to act against either England, France, or the United States.

This reasoning seems to me sound. I believe we should, however, avoid putting ourselves out on any long limb. I do not think we should sell the Chinese arms or munitions on credit, but I believe we should give the Chinese Government a credit of one hundred million [Page 545] dollars for the purchase of flour and gray goods in the United States.

We shall have to take a loss on our wheat and cotton anyhow. If we sell the Chinese Government flour instead of wheat and gray goods instead of cotton, we shall get the benefit of the first processing and even if we should lose the hundred million, it would be money well spent.

I have talked over this idea with Henry Morgenthau and find that he is entirely in accord with me. As you know, he suggested to the Chinese Ambassador in Paris that the Chinese Government should send K. P. Chen to Washington and I have just received information that Chen will reach Washington about the same time that Henry returns.

If you should approve of this proposal, I suggest that you should let me know in advance so that I could try to push Bonnet into making good his statements to me with regard to the readiness of the French Government to take simultaneous and similar action.

I have thought about this a lot and I feel certain that we ought to do it. I hope you will too.

Love and good luck.

Yours affectionately,

Bill
  1. Photostatic copy obtained from the Franklin D. Roosevelt Library, Hyde Park, N. Y.