Office of the Historian

893.51/6739a: Telegram

The Acting Secretary of State to the Ambassador in Japan (Grew)67

Washington, December 15, 1938—7 p.m.

419. 1. This afternoon the Reconstruction Finance Corporation issued a statement to the press as follows:

“Jesse Jones today announced that the Export-Import Bank has authorized credits to the Universal Trading Corporation of New York up to $25,000,000, the proceeds to be used in financing the exportation of American agricultural and manufactured products to China, and the importation of wood oil from China. The loans will be guaranteed by the Bank of China and mature over a period of 5 years. The funds will be disbursed as needed.

Mr. Jones further announced that of the $50,000,000 loan authorization to China in 1934, only $17,105,385.80 was used. In April 1937 a loan of $1,600,000 was authorized for the purchase of locomotives in this country. This loan matures monthly over a period of 5 years. In 1931 the Grain Stabilization Corporation sold China 15,000,000 bushels of wheat for a consideration of $9,212,826.56.

All of these credits are now handled by the Export-Import Bank.

The total actual disbursements for loans to China since 1931 have been $27,051,412.36. $14,419,892.36 has been paid and the balance is being paid as it matures. $3,801,055.62, including interest, has been paid since September 30, 1937, the last payment having been made September 30, 1938.”

2. If anyone makes inquiries or representations to you in regard to this transaction, you should read to them the statement which the Reconstruction Finance Corporation has issued to the press as quoted above and state that the transaction is accurately described in that statement and is a genuine and legitimate commercial transaction. [Page 587] Should any Japanese characterize this transaction to you in any way as an unfriendly act, you should state that you take decided exception to any such characterization of it. You should add that you regard with amazement any such characterization by a Japanese of an essentially commercial transaction consummated for the purpose of legitimately serving American industrial enterprises and American consumers.

Welles
  1. The same telegram was sent, December 15, 7 p.m., as No. 650 to the Consul General at Shanghai for the Embassy in China at Chungking and Peiping.↩