Memorandum of Conversation, by the Adviser on Political Relations (Hornbeck)

Proposed Loan to China

Mr. White of the Treasury Department called me on the phone late this afternoon and between us there was reviewed what has transpired regarding the currently proposed loan to China. (Mr. White has been absent from Washington since shortly after this subject first came up and had returned to Washington this morning.)

[Page 449]

In the course of this conversation, Mr. White said that the Secretary of the Treasury had stated to him that the Secretary of State had said that there was no urgency about this matter and it could well wait until Mr. Fox reaches Washington. I made comment that I would assume that such a statement, if made by the Secretary of State, had been made in the light of an understanding that Mr. Fox was to reach Washington by the end of this week; but that, in as much as we now know that Mr. Fox cannot be here before February 5 if then, I doubted whether any such statement should be regarded as contemplating other than the originally expected interval of time. I made mention of the Secretary of State’s expression of opinion relayed to me by Mr. Gray this morning, which I had relayed to Mr. Southard this afternoon, that it would be desirable to act on this matter at an early date.

There followed some discussion of the political aspects of the loan. Mr. White said that he was not surprised that Chiang Kai-shek had reacted unfavorably to the proposal which had been made by the Secretary of the Treasury through T. V. Soong to Chiang.63 I emphasized the point that in any discussions which may be had with the Chinese, it would seem desirable that this Department’s views as well as those of the Treasury be given full consideration. Mr. White inquired whether the Secretary of State had not been a party to the plan which had been proposed to the Chinese. I replied that the Secretary of State had been in no way a party to that proposal and that the only participation which this Department had had in discussion of that proposal was participation on my part, at the request of the Secretary of the Treasury, in course of which I had expressly stated that I was expressing only my personal opinions and was not speaking officially or as representing an official Department of State view.64

Mr. White indicated that he would try to push matters in consideration of the loan with the Treasury Department’s experts tomorrow.

S[tanley] K. H[ornbeck]
  1. See memorandum of January 12 by the Assistant Chief of the Division of Monetary Research, Treasury Department, p. 435.
  2. Mr. Hornbeck here apparently is referring to a conversation he had with Treasury officers on January 13; see his memorandum of conversation of that date, p. 438.