Memorandum by the Chief of the Division of Far Eastern Affairs (Hamilton)66

I recommend:

That we say nothing further to the British at this time.
That, if the Chinese of their own initiative approach us in the matter, we consider in the light of then existing circumstances what reply we should make to the Chinese, keeping in mind the probable [Page 522]desirability of making reply to the general effect that we of course recognize that the British foreign exchange position is different from the foreign exchange position of the United States; that the question of the terms of an agreement between the British Government and the Chinese Government is of course something to be worked out between the two Governments party to the proposed agreement; and that our principal interest, and it is a real one, is that agreements for cooperation between or among any of the allied nations be worked out amicably and harmoniously. We should of course, in my judgment, be careful not to encourage the Chinese in any anti-British feeling which they may evidence. At the same time it is believed that we should avoid appearing to be a special pleader for the British position in the matter.
That I be authorized to send Dr. White of the Treasury Department a copy of this memorandum and the memorandum of May 21 covering our conversation with Sir Frederick Phillips and Mr. H. Ashley Clarke.67

M[axwell] M. H[amilton]
  1. Addressed to the Assistant Secretary of State (Berle) and the Adviser on Political Relations (Hornbeck); copy forwarded on June 9 to Harry Dexter White, Assistant to the Secretary of the Treasury.
  2. On May 23 Mr. Hornbeck indicated his concurrence and stated: “In case anything further should be said to the British, it would be my recommendation that they be advised to be liberal and be cautious: the Chinese are becoming constantly more impatient of British attitude, methods and performance.”