761.93/1732: Telegram
The Ambassador in China (Gauss) to the Secretary of State
[Received 4:15 p.m.]
1864. An official of Cabinet rank, speaking “very privately”, informs us that recent Soviet withdrawal from Sinkiang has been due to only one reason: almost complete rapprochement between the Sinkiang chairman and the Central Government; that, while the change reflects considerable political success on part of Central Government, consequent economic problems are almost insoluble. He states that an arrangement has been made with the Sinkiang chairman whereby the latter continues to issue and use his own currency pegged at 1 to 5 for National currency, but Sinkiang people will not use National currency even at this rate and Sinkiang currency is not acceptable in China outside of the province, making it impossible for Sinkiang inhabitants to purchase from China quantities of tea (regarded as a necessity), sugar and various consumers’ goods including clothing formerly obtained from Russia. He did not deny or affirm report recently current that the Central Government was purchasing at very high prices a large number of trucks to ship tea, sugar, et cetera, into Sinkiang but said Government was endeavoring to supply some of these articles to the province. He said that about one regiment of Soviet troops still remained at Hami and there were still some Soviet airplanes in Sinkiang. (According to Consul, Tihwa, 300 trucks and 8 airplanes at Hami.)