893.515/1526
The Financial Counselor of the British Embassy (Pinsent) to the Adviser on International Economic Affairs (Feis)
Dear Feis: Our Ambassador at Chung King telegraphed to London on the 5th February that Chiang Kai Shek had remarked that, in order to make proper use of credits which the British and United [Page 602] States Governments were granting for currency purposes, the Chinese Government suggested discontinuing the support of the market in Shanghai. Chiang Kai Shek asked for a fresh expression of the British Government’s view in the light of the present situation in Shanghai.
A reply was telegraphed from London to Chung King on the 11th February, in the following terms:—
“We should consider it a fatal mistake to reverse the policy of supporting FA–PI unless and until some other constructive policy can be adopted in its place. We doubt if such constructive policy can comprise exchange control in China, which would not be effectively administered under existing conditions in China.”
Yours sincerely,