893.515/1429
Memorandum of Conversation, by the Chief of the Division of Far Eastern Affairs (Hamilton)
The French Ambassador called at his request. He left with me the attached aide-mémoire88 in regard to communications received by the French Government from the Chinese Government in regard to matters relating to the currency situation in China. The Ambassador asked me whether the Department had received similar communications and, if so, what attitude the Department proposed to take in regard to the Chinese communications.
I told the Ambassador that several days ago we had received two communications from the Chinese Ambassador here. I said that in one of these communications the Chinese Government referred to arrangements which were under discussion with American bondholders looking toward resumption of foreign loan services.89 I said that in this communication the Chinese Government stated that it had been forced to the conclusion that it was not in position at this time, due to the hostilities, to proceed with the negotiations and to make the payments contemplated. I said that the Chinese Government had asked us to explain the situation in confidence to the Foreign Bondholders’ Protective Council, J. P. Morgan and Company and the Continental Illinois National Bank and Trust Company of Chicago. I said that, pursuant to the Chinese request, the Department had brought the views of the Chinese Government confidentially to the attention of the organizations named.
I told the Ambassador also that we had received another communication from the Chinese Ambassador here enclosing the text of a cablegram from the Chinese Minister of Finance in regard to the [Page 705] question of Chinese national currency and foreign exchange.90 I told the Ambassador that in this communication the Chinese Government had made a request that the American and other governments aid in maintaining the value of the Chinese dollar. I told the Ambassador that the Department had acknowledged the receipt of this communication from the Chinese Ambassador91 and that an officer of the Department had orally explained to the Chinese Ambassador92 that this Government had been observing with care developments in the currency situation in China and appreciated the difficulties which confronted the Chinese Government, a situation which affects adversely not only the Chinese Government but also interests of other countries, including the United States. I told the French Ambassador that it had been pointed out to the Chinese Ambassador that each government has to proceed within the framework of the institutions and capacities of the country for which it acts and that each of the governments to which the currency situation in China presents a problem must proceed in its own way. I told the French Ambassador that in the conversation with the Chinese Ambassador reference had been made to the methods which this Government had used for the safeguarding of its interests and to the benefits which had accrued to China therefrom.
After I had explained to the French Ambassador the action taken by the Department in regard to the two communications which the Department had received from the Chinese Ambassador here, the French Ambassador said that there was no need for the Department to reply further to the aide-mémoire which he had handed to me.