Foreign Relations of the United States, Diplomatic Papers, 1940, The Far East, Volume IV

893.516/725a: Telegram

The Secretary of State to the Consul General at Shanghai (Lockhart)

Washington, December 31, 1940—7 p.m.

688. Reference Department’s 193, May 2, 7 p.m.⁶³ In view of the reported imminent establishment of the new so-called Central Bank by the Nanking régime and the probable issuance of a new currency by that bank, the Department desires that you make a new approach to the representatives of the National City Bank, the Chase Bank and the American Express Company along the lines suggested in the telegram under reference. In this connection you may refer to the financial assistance which this Government has announced that it is making available to China in the form of an Export-Import Bank credit of $50,000,000 for general purposes and $50,000,000 from the Treasury Stabilization Fund for monetary protection and management as between American and Chinese currencies⁶⁴ (see Radio Bulletin No. 284, November 30, 1940). The details of agreements in respect to these funds are being worked out at the present time.

With respect to the last sentence of the telegram under reference, the Department has not had any recent communication from the British Government on this point but it is assumed that the attitude of the British Government and of British banks remains unchanged. The Department understands that the Chinese Government recently approached the British Government to instruct British banks in this regard and that the Chinese Government planned to instruct Chinese banks to refuse to have anything to do with the new bank or to accept the new currency.

The Department would appreciate the receipt as soon as possible by naval radio of a report on the reaction of the American financial institutions concerned to your approach and their probable attitude toward the new bank and its currency. The Department would also like to have your opinion in regard to the attitude which British banks, other foreign banks, and Chinese banks in Shanghai may take toward the new bank and its currency. The Department suggests that you confer with your British colleague on this matter.

Sent to Shanghai. Repeated to Peiping and Chungking. Shanghai please repeat to Tokyo.

Hull

63. Not printed; it gave instructions based upon telegram No. 127, April 24, 7 p.m., to the Ambassador in Japan, p. 512.
64. See press release, issued by the White House November 30, Department of State Bulletin, December 7, 1940, p. 521.