893.48/1867
Memorandum by Mr. Joseph M. Jones of the Division of Far Eastern Affairs47
Reference Chungking’s 94, February 26, 9 a.m., in regard to civilian relief and currency support in China.
A “reliable informant” in Chungking has suggested to the Embassy that the purchase and importation of cereals and flour into Shanghai and north China is a serious strain upon the exchange value of the Chinese currency (imports of cereals and flour into China were valued in 1939 at US$67,000,000 compared with an average of US$17,000,000 in 1936–1937, and imports are believed to be continuing in large volume this year) and that not only would this strain be somewhat eased but prospective starvation, undernourishment, riots and violence might be avoided if the United States should provide a gift of not exceeding 15,000,000 bushels of surplus American wheat for distribution in China.
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Conclusions
Bearing in mind that, with the exception of certain flood areas in north China, crops in China are reported as normal or above normal; [Page 645] that neither the Embassy at Peiping nor the Consulate General at Tientsin has apparently considered the situation as sufficiently urgent to warrant suggesting to the Department the possible rendering at this time of assistance by the American Government; that there is now under consideration by the Chinese, Japanese, and British Governments utilization of 100,000 pounds sterling for flood-relief purposes in north China; that an American organization is at present prepared to expend $160,000 for relief purposes if such expenditure is found to be practicable; that the Federal Surplus Commodities Corporation does not possess surplus wheat; that the Red Cross is not in position to provide funds for the purpose indicated; that the sending to China, as suggested, of 15,000,000 bushels of wheat would, in effect, provide but slight and inadequate support to the Chinese currency; that the areas in which relief need is acute are under Japanese military control and efforts to afford relief in such areas would present various difficult political considerations; and that, in view of the recent extension to China by the Export-Import Bank of a loan of $20,000,000, further requests at this time for additional aid to China might be inopportune, it is suggested that, at least for the present, no action be taken with a view to implementing the suggestion outlined in Chungking’s telegram no. 94, February 29, 9 a.m.
- Initialed by the Chief of the Division (Hamilton). In telegram No. 38, March 16, 2 p.m., the Department informed the Ambassador in China that a copy of this memorandum was being sent to him by airmail (893.48/1839).↩