711.93114A/83: Telegram

The Minister in Switzerland ( Harrison ) to the Secretary of State

3583. American Interests—China. Department’s 1765, May 20,65 delivered Foreign Office May 23. Swiss Foreign Office official stated Japanese would certainly not agree Fontanel borrowing CRB dollars in China. Such action already carefully explored by Swiss and naturally not permitted by Japanese who desire obtain free foreign exchange (i.e., Swiss francs).

Foreign Office official stated Gorgé reported he had been informed in conversation with Japanese Foreign Office official that Japanese would give one [additional?] CRB dollar for every CRB dollar transferred Shanghai via Yokohama Specie Bank. Such action tantamount reducing exchange rate to 9.18 Swiss francs for 100 CRB dollars instead of 18.36.

Swiss endeavored have such action taken regarding 2,150,000 Swiss francs transferred Shanghai in April (see Legation’s 2534, April 2066). Gorgé now reports Japanese refuse make such concessions as they claim transfer of 2,150,000 [francs] has already been made and was to cover previous expenditures.

Gorgé also reports he has been informed verbally Japanese disposed release 30,000,000 of 60,000,000 [CRB dollars] blocked Shanghai. Fontanel however reports no such instructions given Japanese Consulate General, Shanghai, and no action taken. Of these 60,000,000, 18,100,000 which were purchased at average rate of 3.16 Swiss francs per 100 CRB dollars are United States Government funds. Remainder are British and Netherlands. Therefore if Gorgé and Fontanel successful Japanese might release 9,050,000 CRB dollars of U.S. Government funds.

Legation obtained foregoing informally from Foreign Office officials who refuse submit notes claiming that nothing definite known and negotiations still in progress. All Gorgé’s information apparently from conversations at Japanese Foreign Office. Swiss endeavoring do utmost as their interests also vitally concerned. Confidential nature foregoing stressed as Gorgé reports Japanese say they are not according Germans similar facilities.

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Foreign Office officials doubtful outcome of negotiations67 but feel all possible steps must be taken and hope eventually obtain some satisfaction promises given Gorgé.

  1. Not printed; it stated that methods of financing the greatly increased cost of financial assistance in occupied China were being studied and requested that inquiry be made “whether Fontanel, if authorized by the Department, could borrow CRB currency locally against U.S. dollar credits to be established in blocked accounts in the United States, and whether he would be permitted to disburse proceeds of such loans.” (711.93114A/75)
  2. Not printed; but for summary, see footnote 39, p. 1029.
  3. In telegram 3649, June 8, 10 a.m., the Minister in Switzerland reported informal advice from the Swiss Foreign Office that, pending outcome of these negotiations, “further transfers to Shanghai would not be made and that consequently additional estimated requirements reported in fifth paragraph my 2270, April 12, will not be required prior [to] June 30 but that natural advance of 3,000,000 francs will be required early [in] July for operating expenses and general distribution to field offices.” In telegram 2159, June 24, midnight, to Bern, the Department authorized the Minister to pay $54,000 to the Swiss Government for transmittal to the International Red Cross and to make future monthly payments of $18,000 in the same manner. (711.93114A/84) The authorization was amended in telegram 2331, July 7, midnight, so that the Minister might make payments directly to the International Red Cross. (711.93114A/6–2944)