893.51/7661: Telegram
The Secretary of State to the Ambassador in China (Gauss)
Washington, December
29, 1942—4 p.m.
1278. For Adler from the Secretary of the Treasury. Your 1493, December 13, 9 a.m.
- 1.
- In your cable you report Dr. Kung as being willing to accept any
decision which the Treasury may wish to make as to the amount of
gold China should purchase from the Treasury, whether it be 20, 30,
40, or 50 million dollars. In view of the considerations given
below, the Treasury feels that the already agreed-to U. S. $20
million would be the more appropriate amount.
- (a)
- The Treasury does not see how the Government of China would benefit by the purchase of additional gold on which the Government of China would have to pay the required charges.
- (b)
- The information received from you and Mr. Hsi regarding Dr. Kung’s attitude on the purchase of additional gold would seem to indicate that Dr. Kung does not feel that there is any pressing need for additional gold.
- (c)
- The purchase of additional gold by the Government of China would require the raising of funds by the U. S. Treasury with which to purchase the additional gold. The U. S. Government would have to pay interest on these funds at a time when it is already engaged in the task of borrowing tremendous sums to meet its current fiscal needs.
- (d)
- Unless China would benefit in some way by the purchase of additional gold, it would be difficult for the Treasury to justify to the public increasing the indebtedness of the U. S. Government in order to make possible the purchase of gold by the Government of China for earmarking here.
- 2.
- Please inform Dr. Kung of the above. [Morgenthau.]
Hull