Memorandum by the Chief of the Financial Division (Livesey) to the Assistant Secretary of State (Berle)

Mr. Berle: Since your suggestion arising from Chungking’s telegram 396 of April 12, that the Department should review the Chinese financial situation and consider whether it should take any initiative concerning it, Mr. Luthringer has prepared a memorandum under date of April 24 of which a copy is attached.57 The original has been started toward you through FE and PA/H58 covering a telegram to Chungking which Mr. Luthringer has drafted rather tentatively to crystallize a possible line of independent action by this Department in case such is deemed desirable to at least open up the situation more fully.

In the meantime I think you may be interested in reading the memorandum. You may have noticed Chungking’s 447 of April 2359 which has the humble status of an economic weekly report hereafter to be made in routine but which shows a rapidly worsening situation, the price indices increasing by percentages which I had better refrain from mentioning here. The index figure cited in the second paragraph of Mr. Luthringer’s memorandum of yesterday is left far behind by the March figure now reported.

The little Treasury group which deals with these matters has been busy over Cuba and other questions lately but has rather expected to get busy in the next few days on China.

F. Livesey
  1. Supra.
  2. Division of Far Eastern Affairs and Adviser on Political Relations (Hornbeck), respectively.
  3. Not printed.