124.935/603a: Telegram
The Secretary of State to the Ambassador in China (Gauss)
1684. The Department has interposed no objection to the instructions recently given Adler by the Treasury Department in regard to the possible acquisition of Chinese currency. (Department’s 1672, November 20.) However, in view of probability that negotiations may be protracted and that conversion rate to be suggested by Kung may be unsatisfactory Department has informed Treasury that pending wholly satisfactory completion of proposed arrangement Department must maintain freedom of action in arranging for acquisition of Chinese currency on a realistic basis. As an interim measure, therefore, Department has requested War Department to arrange for shipment of $500,000 in United States currency, your estimated quarterly needs, to Army Finance Officer at Kunming and to authorize him to cash drafts on the Secretary of State and Treasury checks for all Foreign Service and civilian governmental establishments in China. War Department is agreeable to shipment provided prior approval of General Stilwell is obtained. Please impress on Stilwell Department’s urgent need for his approval.
Under tentative arrangement, if entire amount cannot be obtained in Karachi, shipment will be made from here, in which case War Department has been asked to endeavor to make interim shipment from Karachi of $150,000 to meet your November 30 needs. Tentatively it is proposed to ship denominations as follows:
| $100,000 | in | $50 | bills |
| $200,000 | in | $20 | bills |
| $150,000 | in | $10 | bills |
| $ 45,000 | in | $ 5 | bills |
| $ 5,000 | in | $ 1 | bills. |
Please report if satisfactory.
Full reply to points raised in your 2095, November 5 and other telegrams will be made shortly.