The Chargé in China ( Atcheson ) to the Secretary of State
Chungking , May 22, 1943—10 a.m.
[Received 12:05 p.m.]
[Received 12:05 p.m.]
755. To Secretary “Treasury from Adler. TF–122. Refer your 587 of May 6 and my TF–120 May 12.34
- Board has been officially notified by Ministry Finance that it has instructed Central Bank to handle arrangement whereby foreign Embassies and consular bodies are to receive official rate of exchange plus 50% and that arrangement is to be retroactive from May 1.
- Saw Dr. Kung on 19th. He informed me of his interview with representatives of foreign missionary and philanthropic organizations [Page 545] in Chengtu indicating that he had agreed to match foreign contributions for famine relief and to grant the official rate plus 50% for foreign missionary philanthropic and educational expenditures. He added that this arrangement and the arrangement with respect to foreign Embassies and consular bodies did not signify the establishment of special rates for special purposes nor did they signify the granting of subsidies. But it would appear that however the arrangement will be dressed up they will constitute special rates for special purposes in fact if not in name however their status remains ambiguous pending further clarification.
- I understand Central Bank has already received instructions concerning the arrangement with respect to foreign missionary etc. organizations but Board has not yet been officially notified.
- There is one aspect of the proposed new arrangement with respect to foreign missionary etc. organizations to which I feel your attention should be called. While the arrangement with respect to foreign Embassies etc. does not involve large amounts of foreign exchange and can be regarded as exceptional case the proposed arrangement with respect to foreign missionary etc. organizations would involve substantial amounts of foreign exchange. The fact that under proposed arrangement the substantial amount of foreign exchange involved would accrue solely to the Central Bank would appear to entail an encroachment on the effective functioning of the Board. While of course in the absence of anything better there can be no objection to granting foreign missionary etc. organizations the official rate plus 50% there are grounds for preferring an arrangement which would achieve this purpose and at the same time allow the Board to continue to be the recipient of foreign exchange from remittances to foreign missionary, etc. organizations. It would be appreciated therefore if you could inform me of Treasury’s attitude to the proposed arrangement before the matter formally comes up before the Board. [Adler.]