893.51/6760
The British Embassy to the Department of State58
Aide Mémoire
Sir A. Cadogan informed the United States Chargé d’Affaires in London on December 3rd that to their regret His Majesty’s Government were still not quite ready to furnish considered views in regard [Page 582] to possible punitive measures of retaliation or pressure on Japan. It had, however, occurred to them, he said, that third party interests in China might derive a certain measure of protection and benefit if, quite apart from economic and financial reprisals, steps were taken to support the Chinese currency. The Chinese Government had in fact recently requested that British banks should make a contribution of at least £3,000,000 sterling to a currency stabilisation fund, an equal amount being put up by Chinese banks. A small committee of Chinese and British bankers would control policy and the operation of it through the two British banks i. e. the Hong Kong and Shanghai Bank and the Chartered Bank of India, Australia and China. The Chinese Government intimated unofficially at the same time that if foreign support could be increased to five or ten million pounds, the margin of safety would make the Chinese dollar impregnable over a long period.
The United States Chargé d’Affaires was informed that His Majesty’s Government were in fact considering a proposal to introduce legislation to guarantee a contribution of £3,000,000 by the Hong Kong and Shanghai Banking Corporation to the projected fund. Appropriate arrangements would of course be made to try to ensure that the fund if set up would be utilised solely for the purposes for which it was said to be necessary.
So far His Majesty’s Government have reached no conclusion in the matter but their decision on the question of a contribution to a currency stabilisation loan would be greatly influenced by the knowledge that the United States Government were willing to take parallel and simultaneous action.
- Handed to the Adviser on Political Relations, on December 8, by the British Chargé.↩