893.5151/920: Telegram

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

527. With reference to final paragraph of my 492, April 5, noon, Dr. Kung in response to approach from Belgian Ambassador (Doyen of the Diplomatic Corps) through Foreign Office, has reluctantly indicated willingness to give a “subsidy” of 50 cents on the dollar to diplomatic missions here as relief from exchange situation. He stipulates that there shall be no publicity [and?] no “special diplomatic rate” fixed and that word “subsidy” shall be used as indicating that step is purely voluntary on part of Finance Ministry and not matter to be used as precedent for other quarters.

Acting Foreign Minister in response to Belgian Ambassador’s objection to ideas of “a subsidy to diplomatic missions”, offered the refined alteration to “exchange subsidy” which the Belgian Ambassador accepted. The latter is now endeavoring to obtain agreement of other chiefs of missions for report back to Foreign Office.

Without making any commitment on our part I have discussed matter with Belgian and British Ambassadors and with Acting Foreign Minister. I informed the latter that use of the word “subsidy” in any context was most inappropriate from standpoint of Chinese Government as well as diplomatic [missions?]. He agreed. I told him and the two Ambassadors aforementioned that I would have to submit the matter to my Government.

The Foreign Office is apparently not informed regarding our reciprocal Lend-Lease plans and it is possible that neither is Dr. Kung. While I perceive no reason why other diplomatic missions should not take what exchange relief they can obtain, irrespective of the effect which a reciprocal Lend-Lease agreement might have on our position, I desire the Department’s instructions in the premises.