893.5151/929: Telegram

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

892. TF–129. Sec[retary of the] Treas[ury] from Adler, re your 697, May 31.

In course of conversation reported in TF–128,27 Dr. Kung indicated that clause 2 of Ministry of Finance’s measure, reported section 1 my TF–120, May 12,28 did not mean that the Board [would] not be the ultimate recipient of the foreign exchange from diplomatic and consular bodies. Nor did the other arrangements preclude the Board from being the ultimate recipient of foreign exchange from missionary organizations, etc. He could not make the Board the immediate recipient of such foreign exchange as the Board could not buy foreign exchange at 30 or 40 when its official rate is 20. It should be noted, however, that Dr. Kung did not commit himself on whether the Board would be the ultimate recipient of foreign exchange converted into fapi at 30 or 40.
The Board has not yet discussed questions raised in your 697. In fact the chairman is avoiding calling a meeting until whole situation [Page 421] with respect to the Board’s status is crystallized. In the meantime the Central Bank is going ahead on the assumption that the Board will automatically consent to the Ministry of Finance’s proposal with respect to missionaries, etc.
Board has been officially notified by Ministry of Finance of a proposed arrangement whereby foreign military officers and journalists will receive official rate plus 50% from Central Bank with which foreign exchange accruing from these sources will be kept in a separate account. [Adler.]
  1. Telegram No. 879, June 9, 1 p.m., p. 457.
  2. Telegram No. 692, 10 a.m., p. 535.