893.515/1439
The Consul General at Shanghai (Gauss) to the Secretary of State
[Received September 6.]
Sir: I have the honor to quote below an excerpt from an article by “Observer”, which appeared in the Sunday Mercury (American) on August 6, 1939. The portion appeared in heavy type in the printed article and read:
“A report circulating in financial circles, which is not perhaps common knowledge, insinuates that a few days prior to the withdrawal of the support of the Chinese Dollar by the Control Committee last month, the wife of a ranking Government minister in Chungking telegraphed to Shanghai to a foreign broker to buy for her account [Page 706] the huge sum of forty thousand (40,000) Pounds Sterling. Without doubting in the least the integrity of the minister, the disclosure of an important State secret to his enterprising spouse is a grave impropriety. And for the wife of a Government minister to take advantage of a State secret to ‘facilitate the flight of capital from China’ for her personal benefit at the present juncture is conduct deserving public condemnation. Nothing could be more injurious to China’s cause than for her officials and their kin to abuse the sympathetic support of her friends.”
From time to time rumors are quietly current concerning the participation of members of the Chinese Government or of their families in transactions accruing to their personal benefit until the feeling has grown in many quarters that there is in effect substance to them although it is admitted that the alleged transactions would indeed be difficult to prove. In this connection, reference is made to the remarks at the bottom of page 6 of the Embassy’s confidential despatch no. 2655 [2855], July 21, 1934, entitled “Italian Aviation Interests in China”, the Consulate General’s confidential despatch no. 117, January 30, 1936, entitled “Further Publicity in Regard to the Slump in the Chinese Government Bond Market”93 and more recently to the Ambassador’s strictly confidential telegram No. 485 of August 3, 1939.
Respectfully yours,
- Neither printed.↩