893.24/1679: Telegram
The Ambassador in China (Gauss) to the Secretary of State
[Received December 17—3:05 a.m.]
2429. With reference to proposal that China should now after such a long delay sign reverse Lend-Lease agreement, we suggest that this sudden Chinese decision likely has as principal motive the making of a gesture which would gain China face and praise in the United States and at same time avoid possibility of congressional and other criticism if the circumstances of exploitation of our Army in China [by?] Minister [Page 586] of Finance’s services and facilities should become publicly known. Unless steps are taken to implement proposed arrangement, the gesture would cost China nothing. Reports by Embassy to Department and by Adler to Treasury on attitude of Minister [of] Finance do not encourage us to believe that agreement if signed will be implemented satisfactorily.
On other hand it might be serious tactical error to decline to enter into agreement we ourselves proposed and give Chinese opportunity to say they offered to share heavy burden of our military operations in China and had been turned down.
We therefore propose that we inform Chinese orally that we shall be very glad to enter into the agreement but that we suggest that actual signing be timed to coincide with conclusion of appropriate detailed arrangements to implement it. This oral statement might be supplemented by formal approach already recommended setting forth in precise terms the nature and extent of financial services we desire from China.
If notwithstanding foregoing Department considers it preferable to sign the agreement forthwith as accomplishing at least a step forward, we suggest that means be taken to offset possible Chinese effort to outmanoeuvre us by making clear in an official American announcement that the agreement is confined to broad aspects of principles and intentions which merely lay the ground work for implementation which we expect Chinese Government will undertake without delay, especially in provision of arrangements and facilities and services for our Armed Forces which are within capacity of China to supply.