893.51/6840: Telegram
The Chargé in China ( Peck ) to the Secretary of State
[Received March 14—10:15 a.m.]
178. In discussing with an officer of the Embassy the recent grant of British credits to China, Dr. Arthur N. Young8 remarked that the primary aim of the scheme is of course to stabilize the Chinese national currency. He added that the authorities concerned hope [Page 659] and anticipate however that it will not be necessary to dip into the fund in order to support the currency but rather that it will be utilized for exchange stabilization operations in such a way as to return a profit. He said he thought the scheme would be successful in practice and commented that the knowledge that such a fund was existent would probably act as a deterrent to attempted speculative or political manipulations of Chinese currency.
Young professed to believe that the action of London in guaranteeing the credit marked a vital change in British policy in the Far East. He interpreted it as a realization on the part of Britain that to support the Chinese Government is the surest means in the present circumstances of preserving British interests in the Far East.
The informant also stated in strict confidence that negotiations are now being conducted in Paris for the granting of French credits for the purchase of commodities, presumably of a commercial character. He thought that the chances for the consummation of this latter project were bright but observed that the amount of the credit would not be so substantial as the recent American and British grants.
Repeated to Peiping, Peiping mail code text to Tokyo.
- American adviser to the Chinese Ministry of Finance.↩