893.51/7429
The Acting Secretary of State to the Secretary of the Treasury (Morgenthau)
My Dear Mr. Secretary: I refer to your request for my comment in regard to the proposed agreement to extend financial aid to China pursuant to Public Law 442, approved February 7, 1942,11 and Public Law 452, approved February 12, 1942.12
The matter is, of course, one with regard to which responsibility lies primarily with you and the President. In my opinion, retention of Article II of the draft originally presented to Dr. Soong or an exchange of letters along the lines thereof would serve useful purposes both for the Chinese Government and for this Government. I believe that such a provision would be reflective of the cooperative spirit which underlies the common war effort of the two countries and might be of some assistance to the Chinese Government in resisting pressure from any group in China which might advocate an unwise use of any part of the funds made available.
Realizing that you have considered both the economic and the political angles of the problem, I am prepared, in view of the opinion which you have expressed orally that the adoption of the Chinese Government’s suggestions would be satisfactory, to concur in the conclusions at which you arrive and the course which you propose.
Sincerely yours,