893.20/729
The Ambassador in China (Gauss) to the Secretary of State
[Received September 25.]
Sir: With reference to my telegram no. 365 of August 26, 2 p.m. on the subject of the reported American military mission to China [Page 718] and British proposals for coordination of Anglo-American aid to China, I have the honor to enclose for the information of the Department copy of a memorandum of my conversation with the British Ambassador on August 26.86
At the same time, I enclose copy of a memorandum dated August 27,86 submitted to me by the Naval Attaché of this Embassy, Major J. M. McHugh, U. S. M. C., who had a conversation with the British Ambassador after the latter had seen me, and who was later permitted to see and make notes from the telegram sent to London by the Ambassador recommending coordination of Anglo-American aid to China.
This telegram is an interesting document, and I am somewhat surprised that Sir Archibald Clark Kerr was willing to show it to any American official, in view of the implications of some of his statements. At the same time I should state that Sir Archibald is an earnest, energetic and conscientious British official. He is inclined to be outspoken and frank. He is friendly to Americans and I believe he is genuinely sincere in his attitude on Anglo-American collaboration, although of course he approaches the subject from a distinctly British point of view.
In point 4 of his telegram as it is recorded in the Naval Attaché’s memorandum, Sir Archibald makes reference to the appointment of the British economist Niemeyer87 as a “first class” economic adviser, commenting that the Americans have been content to designate a “third rate man” (Fox). Sir Archibald mentioned to me the Nie-meyer appointment and the possible relations with Fox. I dismissed the matter with the statement that Mr. Fox had not been sent out by the American Government as an economic adviser but as the American nominee for the stabilization board, that he is principally concerned with stabilization problems—now, probably, also, with the difficulties arising out of the “freezing” operations—and that while he certainly had expressed the frank hope, when he arrived, that the stabilization board might take a broad view of the stabilization operations and be able by a close and intelligent study of related economic and financial problems to make suggestions and recommendations to the Chinese Government for the improvement of the general economic and fiscal position, I would not consider that Dr. Fox was here in the role of an economic adviser nor had I any reason to anticipate that there would be any conflict between him and Mr. Nie-meyer, who, the British Ambassador told me in reply to my inquiry, would not be a member of the stabilization board.
In point 5 of Sir Archibald’s telegram it is mentioned that Britain has a very real interest in the Lend-Lease Aid to China “because such [Page 719] assistance must pass through British controlled territory in [to?] China.” I have heard the same view expressed more bluntly by Britons in China in words to the effect that Britain controls China’s life-line.
He speaks also of the need for common investigation of the Burma Road problem. The British no doubt would have been pleased had the recommendation of the Arnstein “mission” for the appointment of Mr. Holmes, the controller of the Burma section of the Burma–Yunnan highway, as director general or managing director of the China section of that road, been acceptable to the Generalissimo. I believe however that Sir Archibald is anxious that there should be full cooperation by the Burma authorities in the forwarding of American lend-lease supplies for China, though it is evident from his message to London that he considers that since such supplies pass through Burma the British authorities should be consulted in a coordination of the American effort in aid to China.
In point 7 of his message to London, Sir Archibald expresses concern as to the possible relations between the American military mission and the British Major-General-Military Attaché who is the “nucleus” of a “full dress” military mission. As I reported in my telegram under reference, I told Sir Archibald that, knowing General Magruder and also General Dennys, the British Military Attaché, I had the utmost confidence that if the American mission should come to China there would be close liaison between the two officers.
I am in favor of the closest possible collaboration between the American and British authorities in respect to matters relating to aid to China and other problems of mutual interest. I am impressed by the need of the most complete coordination of all American effort in China. It seems to me, however, that the extent of coordination as between the American and British authorities on military problems and lend-lease aid to China must remain to be worked out on the ground after the arrival of the American military mission.
Respectfully yours,