Memorandum of Conversation, by the Assistant Secretary of State (Berle)

Participants: Mr. Harry White and Mr. Bernard Bernstein, of Treasury;
Mr. Lauchlin Currie;12 Mr. Frederick Livesey;13 and
Mr. A. A. Berle, Jr.

A meeting was held at the Treasury yesterday regarding the request of the Chinese Government for a loan of five hundred million dollars.

The Treasury people said that this loan could be justified only in the event that a political and military result would be had out of it. Plainly, the loan probably would not be repaid. The Treasury was prepared to go into the matter promptly if the Secretary of State would write a letter saying that for political reasons it was deemed desirable to make such a loan.

I said that the Secretary had recommended a loan of up to three hundred million dollars, more than a month ago, and that he was still of the same opinion. Our political people seem to believe that the political and military results arising from such a loan justified it. Naturally, if anything could be done to strengthen the economic structure along with the loan, that was so much clear gain.

The question was left over for further discussion whether the loan should be an Anglo-American loan or a straight American loan. Mr. Lauchlin Currie vigorously opposed British participation, saying that we were in a better position to do the job. A communication from Sir Frederick Phillips indicates that the British are thinking of small amounts—say, eighty million dollars—and the general opinion was that any small amount like this would probably not cover the situation.

A. A. Berle, Jr.
  1. Administrative Assistant to President Roosevelt.
  2. Chief of the Financial Division. For memorandum by Mr. Livesey on the same conversation, see infra.