893.24/556: Telegram

The Chargé in China (Peck) to the Secretary of State

257. Embassy’s No. 215, March 28, 9 a.m.60 During a conversation with Minister of Finance Kung on April 11 he referred to an earlier inquiry from me and volunteered following information about the German-Chinese negotiations relating to a barter arrangement: according to his recollection, negotiations began in 1934 and were concluded in 1936 resulting in the German Government granting the Chinese Government a revolving fund credit of 100,000,000 marks for the purchase of German goods including munitions. China was given a list of Chinese products desired by the German Government and all shipments were to be used to offset purchases made under the credit. China has placed orders aggregating 380,000,000 marks in value but some orders such as those for naval supplies were cancelled after the opening of the present hostilities.

[Page 751]

A balance of about 12 million marks still remains in the credit and although for various reasons China has been slow in supplying commodities desired by Germany such as vegetable oils, nevertheless the special representative of the German Government Dr. Voigt while here urged that the remainder of the credit be utilized and that shipment of Chinese products be resumed. Such articles would be transported from Hong Kong in German ships. Munitions of war may still be purchased but from private firms and not from Government arsenals as heretofore.

The Department will note that this account differs only slightly from that in the telegram in reference.

Repeated to Peiping.

  1. Ante, p. 661.