The Secretary of State to the Secretary of the Treasury (Morgenthau)

My Dear Mr. Secretary: Reference is made to Generalissimo Chiang Kai-shek’s request of December 30, 1941 that the United States Government provide China with $500,000,000 of financial help in order to support Chinese morale and prevent the effects of further depreciation of the Chinese currency and deterioration of the fundamental economic situation in China (Ambassador Gauss’ telegram 548 of December 30, 194143). Reference is also made to Ambassador Gauss’ recommendations thereon as transmitted in his telegram 549 of December 31, 1941,44 and to informal discussions of the matter by officers of the State and Treasury Departments and with Mr. Lauchlin Currie.

The Generalissimo’s proposal has been given very careful consideration. I feel that, as an act of wartime policy and to prevent the impairment of China’s military effort which would result from loss of confidence in Chinese currency and depreciation of its purchasing power, it is highly advisable that the United States extend financial assistance to the Government of China in amounts up to $300,000,000 at the present time. I believe that a determination of this Government’s policy to this effect need not await ascertainment of the attitude to be taken by Great Britain on the similar Chinese proposal with reference to sterling credits.

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I feel that the greatest possible expedition in reaching a position where an announcement can be made is highly important. I feel also that it would seem to be highly desirable that the British Government be kept currently informed of our views and decisions in regard to this matter in order that the British Government may be afforded opportunity, should it so desire, to take simultaneous and comparable action.

Sincerely yours,

Cordell Hull