893.102 Tientsin/496
The Department of State to the British Embassy
Aide-Mémoire
Reference is made to the British Embassy’s aide-mémoire of August 31, 1939, in regard to efforts to bring to a conclusion negotiations having to do with the situation at Tientsin.
[Page 246]The Department of State appreciates having the precise information contained in the British Embassy’s aide-mémoire and has given careful attention to the proposals and suggestions contained therein.
With special reference to the proposal, numbered three in section A of the aide-mémoire, in regard to a formula providing for the use of “Federal Reserve Bank currency” in the British Concession at Tientsin, the observation is made that, while circumstances in the Far East have not always rendered it practicable to ensure respect for the principles to which we are committed, this Government has consistently declined to take any affirmative step which would be inconsistent with those principles or to give express assent to any measure which might impair rights which we enjoy by virtue of treaty or international law. It is felt that the more complete establishment of the “Federal Reserve Bank currency” would, by reason of the circumstances governing the issuance of that currency, its inconvertibility and its use in relation to trade control measures, definitely impair American rights, and for this reason, aside from other relevant considerations, the Government of the United States does not see its way clear to giving assent to any formula having for its purpose or as its foreseeable result the more complete establishment or more general use of “Federal Reserve currency”.
Heretofore the American banks concerned have indicated their willingness and desire to cooperate with the British and French banks concerned in the maintenance of a united front against attempts to establish the use of “Federal Reserve currency” at Tientsin. As the British Government is perhaps aware, the American banks concerned must, under existing laws and regulations, make their own decisions with respect to their attitude toward the “Federal Reserve Bank” and its currency. The suggestion is offered that the interested British and French banks may wish to approach the interested American banks with respect to any change in attitude that may be considered desirable.
With reference to section B of the British Embassy’s aide-mémoire, it would appear that, as a prelude to any decision to undertake a joint study of the situation on the spot, there should be drawn up and given prior consideration a detailed program of investigation, formulated on the basis of available data, and a list of desiderata. The Government of the United States would of course be prepared to examine any such program which the British Government may have formulated in this regard or which it may formulate in the future, and which it may care to communicate to this Government. However, the Government of the United States is constrained to observe, with reference not only to section B of the British Embassy’s aide-mémoire but with reference to sections C, D, and E as well, that in its opinion the [Page 247] present situation in China and the attitudes of the Chinese and Japanese Governments are such that the making of efforts along the lines mentioned by the British Government would not appear to offer favorable prospects of achieving the ends desired.