893.51/7656: Telegram
The Ambassador in China (Gauss) to the Secretary of State
[Received December 12—5:10 p.m.]
1476. To Secretary of the Treasury from Adler.
TF–75 continuing TF–74.4
2. There is some confusion here as to status both of savings certificates at time of maturity and of checks or drafts which it is intended to issue in lieu of or in exchange for savings certificates when they are presented in New York at due date. Some quarters in Chinese Government feel (it would appear to me mistakenly) that both certificates and checks or drafts would not be frozen in view of general license 60, (2). In view of subsequent telegram with respect to applicability of general license 60, (2), general ruling number 5, and public circular number 2 and in view of fact that banks are holding up printing of checks and drafts pending clarification of their status, replies to following questions would be appreciated:
- a.
- What is the status of savings certificates issued by (1) Central Bank, (2) Bank of China, Bank of Communications and Farmers Bank, (3) Central and Postal Savings Bank?
- b.
- What would be status of postdated checks or drafts issued in exchange for or in lieu of savings certificates by (1) Central Bank, (2) Bank of China, Bank of Communications and Farmers Bank, (3) Central Trust and Postal Savings Bank?
- c.
- Central Trust is a subsidiary of Central Bank while Postal Savings Bank is a Chinese Government Institution. Are they generally licensed nationals under general license 60 (1), and therefore in same position as Central Bank?
3. Chinese Government shares your view that transactions described in number 1 of your 10825 are undesirable and would appreciate your assistance through use of general ruling number 5. I am informed that Bank of China, Kunming, had sold $100,000 of savings certificates to American nationals (presumably mostly soldiers) up to the beginning of November. From a number of inquiries it would appear that the scale on which American nationals outside Kunming have bought certificates is quite small, partly due to lack of confidence in their convertibility in New York.
[Page 559]I fully agree with you on undesirability of such transactions and suggest that the matter be taken up with the War Department in Washington. It should be noted that contemplated issue of checks or drafts in lieu of or in exchange for certificates might complicate problem of control.
4. For your information, a number of established foreign business houses have been purchasing saving certificates with fapi acquired in the normal course of business. It is felt that such purchases are different in character from purchases of certificates made by residents of the United States temporarily in China before their departure, but your opinion on their desirability would be appreciated. [Adler.]