893.51/6769

Memorandum of Conversation, by the Under Secretary of State (Welles)

The British Chargé d’Affaires79 called to see me this afternoon at my request. I told him that I had consulted the Treasury Department [Page 642] with regard to the request of the British Government contained in the aide-mémoire dated January 6 which Mr. Mallet had left with me last week, and that I had also discussed the questions involved very fully with the President. I told Mr. Mallet that the President had requested me to convey to him for the information of his Government the following considerations:

The Government of the United States not only through the extension of the Export-Import Bank credit mentioned in the British aide-mémoire but through the purchase by the United States Treasury Department of Chinese silver over a long continuing period has taken measures which in their effect have done much to stabilize Chinese currency. The Government of the United States is giving consideration to various further possibilities along the lines involved in these two policies, and it is possible that this Government may consider it desirable to extend further credits of the same character as that recently undertaken by the Export-Import Bank and to consider further purchases of silver similar to those already undertaken.

This Government is not prepared to participate in the loan under consideration by the British Government to the Chinese Government because of the fact that it is doubtful whether the executive branch of the Government has the power to enter into such an arrangement without the specific authorization of the Congress, as well as for other reasons. This Government, however, would be prepared, should the British Government determine on its part to make the loan which it had under consideration to the Chinese Government and should the Government of the United States determine for independent reasons that it was expedient and possible for it either to extend further credits through the Export-Import Bank or to undertake further purchases of Chinese silver, to make announcement of such transactions simultaneously with the announcement by the British Government of its willingness to make a loan to the Chinese Government for the purpose of stabilizing Chinese currency. In other words, this Government would be prepared to take parallel action, although not action identical to that under consideration by the British Government, and the action which would in such event be undertaken by the Government of the United States would unquestionably have the same effect in stabilizing Chinese currency as that being considered by the British Government.

Mr. Mallett told me that he would communicate these considerations to his Government and would advise me of the British Government’s reaction.

S[umner] W[elles]
  1. V. A. L. Mallet.