893.5151/928a: Telegram

The Secretary of State to the Chargé in China (Atcheson)

697. For Adler from the Secretary of the Treasury. Your cables of May 22, TF–122 and of May 12, TF–120.26 Please discuss the following with Dr. Kung and the Stabilization Board:

The Treasury has been informed that the proposal of the Ministry of Finance to extend favorable treatment to consulates and embassies in connection with the conversion of foreign exchange into fapi for their expenditures provides that the foreign exchange which is received from such foreign consular and diplomatic bodies will not be credited to the account of the Stabilization Board of China, but instead will be put in a separate account with the Central Bank. The Treasury does not understand why special treatment is being accorded to these foreign exchange receipts and is disturbed that the Stabilization Board is not the ultimate recipient of such foreign exchange receipts.
In connection with the proposals being considered by the Ministry of Finance whereby foreign missionary, philanthropic and educational organizations would have their contributions for famine relief matched by the Government of China and would be granted the official rate plus 50%, the Treasury feels that any arrangement worked out should continue to keep the Stabilization Board as the recipient of foreign exchange receipts from remittances to foreign missionary, philanthropic and educational organizations. The Treasury cannot see any reason why present arrangements between the Central Bank and the Stabilization Board regarding disposition of foreign exchange should be changed.
Please advise Treasury as to Dr. Kung’s and Stabilization Board’s views on the above matters. [Morgenthau.]

  1. Telegrams No. 755, 10 a.m., and No. 692, 10 a.m., pp. 544 and 535, respectively.