893.61331/303: Telegram
The Counselor of Embassy in China ( Butrick ) to the Secretary of State
[Received October 8—2:40 a.m.]
295. 1. Further to my strictly confidential 258, September 8, Director informs me that on October 1 he concluded a temporary arrangement with the Japanese whereby sales are restricted to 12,000 cases for October, no Japanese adviser and unrestricted use of company funds permitting purchase of foreign exchange. Director is hopeful of obtaining definitive agreement permitting larger sales with other terms unchanged.
2. It seems apparent that the reaching of this agreement on terms acceptable to the company was due to the resolute attitude at [Page 799] the head office in London, the board of directors and the negotiating director in Peiping. I may add that the company will doubtless be a large purchaser of foreign exchange in Shanghai or other markets and that such purchases will either be supplied by the stabilization fund or the black market and unless an excess of foreign exchange exists will have an adverse effect on the value of Chinese currency.
Sent to the Department. Repeated to Chungking and Shanghai.