Memorandum by the Adviser on Political Relations (Hornbeck) of a Conversation With the Chinese Ambassador (Hu Shih)

The Ambassador had called on me with regard to another matter.

At the conclusion of the conversation begun at the Ambassador’s instance, I said that there was a matter regarding which I had been [Page 700] asked to speak with him. I referred to the letter and enclosure above indicated.78 I said that the Ambassador was doubtless cognizant of the action taken in Congress yesterday with regard to the “lending and spending” bill.79 The Ambassador said that he was. I said that I knew that the Ambassador was studying closely the general situation in this country and developments not only in the political and economic fields but in other fields, and that he was aware of attitudes and trends as well as of constitutional and legal procedures and limitations. I said that our Government has been observing with care developments in the currency situation in China and appreciates the difficulties which confront the Chinese Government in connection therewith, a situation which affects adversely not only the Chinese Government but also interests of other countries, including the United States. I said that the Ambassador was thoroughly familiar with methods which this Government has used for the safeguarding of its interests and of benefits which have accrued to China therefrom. I said that each government has to proceed within the framework of the institutions and capacities of the country for which it acts. Thus, each of the governments to which the currency situation in China presents a problem must proceed in its own way.

The Ambassador said that he was well aware of this and that he was sure that Chiang Kai-shek understood it completely, but that there were some other of the Chinese officials who seem slow to understand. He said that he was constantly sending telegrams not only to Chungking but also to his colleagues in London and in Paris trying to get them to understand the realities. I said that I hoped that he and his colleagues would be successful not only in getting Chinese officialdom to understand but in getting some officials of some other countries to understand—to understand especially that each country has its own responsibilities and, even where there may be a common objective, must do its own utmost toward its own fulfillment of its own responsibilities and toward its own safeguarding of its own interests.

The Ambassador said that there had taken place yesterday between Mr. K. P. Chen80 and Mr. Warren Pierson81 a conversation regarding the situation in the light of the defeat of the spending and lending bill. He said that he fully understood the sympathetic attitude of the people and the Government of the United States and that he was sure that, pursuing our own methods, we would continue doing [Page 701] things among the consequences of which there would be benefits to China.

Stanley K. Hornbeck
  1. Reference is to the Chinese Ambassador’s letter of July 29, with enclosure from H. H. Kung of July 28, p. 695.
  2. S. 2684 as amended was passed by the Senate on July 31; Congressional Record, vol. 84, pt. 10, p. 10512.
  3. Adviser to the Chinese Ministry of Finance.
  4. President of the Export-Import Bank.