893.51/7387: Telegram

The Ambassador in China (Gauss) to the Secretary of State

30. For the Secretary of the Treasury from Fox: TF–14. Following is my comment on telegram TF–13.

[Chinese] attitude here changed during the past few days from one of despair to one of firm insistence on financial aid. Doubt if any formal restrictions can be imposed now. Some form of control highly desirable to assure that maximum benefit would go China and the Chinese people. Believe that if early announcement of large loan can be made it would have desired psychological effect and provide better opportunity for obtaining some informal safeguards should all controls prove impossible.

If impracticable to tie up Stabilization Board with loan, could American representation be provided not as a protection for the United States but in order to make certain that most effective use would be made of funds in strengthening financial and economic structure of China? [Fox.]