661.9331/42
The Ambassador in China (Gauss) to the Secretary of State
[Received June 26.]
Sir: I have the honor to refer to my telegram no. 205 dated May 27, 12 noon, in reply to the Department’s telegram no. 107 of May 23, 7 p.m.,95 and to report the following supplementary information regarding the Sino-Soviet barter agreements.
Summary:
China has been granted two credits amounting to U. S. 50,000,000 each and a third for U. S. 150,000,000 according to barter agreements [Page 509] negotiated with Soviet Russia. Repayment began in 1939 and will be spread over a ten-year period. The Chinese have been disappointed with the results of the agreements since shipments from Russia have been very irregular and some of the goods received have proven obsolete. The Chief of the Barter Agreements Office claims that Russia is pressing China very hard for more raw materials. This same official expressed the opinion that China would not endeavor to negotiate another barter agreement after the remaining credit was exhausted because dealings of that sort with Soviet Russia have proved to be too difficult.
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Respectfully yours,
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