893.51/7501a: Telegram

The Secretary of State to the Ambassador in China (Gauss)

510. 1. The Department has received the general impression that despite the recent financial aid extended by the United States to China the monetary and fiscal situation of China is continuing to deteriorate. The Department also has the feeling that China, itself, as indicated in your despatch 384 of April 23, is perhaps not taking as energetic steps of a counter inflationary nature as might be practicable. Specifically has China ever taken any steps to implement such suggestions as those contained in points no. (1), (3) and (4) in the memorandum prepared by Sir Otto Niemeyer which was handed to you on December 20 by the British Ambassador? (Your despatch no. 261, December 31, 1941).72

2. If such steps have been undertaken do you think that China is doing along these lines whatever may be feasible or reasonably expected?

3. The Department would be glad to receive your suggestions or views as to any measures of rationing, price control; stimulation of production, or control of bank credit which China might appropriately adopt.

4. Do you know whether the Chinese Government continues to be interested in obtaining a central banking expert from this country and have you any views as to the desirability of sending such a person to China promptly if a person with the proper qualifications can be obtained? Do not make any special inquiry of the Chinese Government on this point.

  1. Not printed; the points under reference related to the desirability of the Chinese Government taking steps to ration critical war materials, organize and encourage domestic hand work production, and establish control over private bank credit and rates of interest.