The Minister in Switzerland ( Harrison ) to the Secretary of State
[Received 7:49 p.m.]
822. American Interests, China. Department’s 1687, July 17, Legation’s 4482, July 27.96 Swiss note February 7 states Swiss Consulate, [Page 1016] Shanghai, able thus far purchase on free market CRB dollars97 required financial assistance Americans occupied China. Progressive devaluation CRB dollar enabled Fontanel98 augment this monetary relief little by little to compensate rise in cost of living which practically proportionate this devaluation.
Swiss Consulate, Shanghai, now reports Japanese authorities insist that Swiss francs which it needs representation foreign interests be transferred through Yokohama Specie Bank at Tokyo, and its Shanghai branch. Yen would be acquired at rate 98.05 yen per 100 Swiss francs. At exchange rate 18 yen for 100 CRB dollars the cost of 100 CRB dollars would be 18.36 Swiss francs instead of current exchange 2.50.
Current quarterly American relief budget of Swiss Consulate, Shanghai, is 10,000,000 CRB dollars for internees and 3,500,000 for so-called comfort allocations (apparently to compensate above mentioned rise cost of living) making total 13,500,000 CRB dollars. At rate used currently this represents approximately 696,000 Swiss francs while rate envisaged Japanese would bring it to 2,480,000 Swiss francs.
Swiss Foreign Office inquires whether Department disposed augment in foregoing proportion the sum devoted for assistance Americans occupied China or if it desires other arrangements be made this connection. It also points out that Swiss Consulate, Shanghai, endeavoring organize and finance delivery to American internees through intermediary Red Cross gifts in kind which would permit discontinuation said comfort allocations in case American Government not disposed continue maintenance thereof. Would appear, however, that Japanese authorities would require that purchases necessary delivery such gifts in kind also be financed through Swiss francs.
Legation has informally discussed foregoing with Swiss Foreign Office. Latter has telegraphed Fontanel to ascertain whether he has resumed relief payments which were reported as suspended (Legation’s 7574, December 399 and Department’s 3089, December 111). Fontanel’s reply will be forwarded upon receipt.
It appears to the Legation that in view of the above outlined financial control by the Japanese the question of relief payments to Americans in occupied China requires an examination by the Department of the possibility of increasing several-fold the relief maximum [Page 1017] authorized for China under the Department’s instruction no. 1202 of February 14, 1942.2
Swiss request urgent reply.