390.1115A/6–2444: Telegram

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

2160. American Interests, China. Department is gratified that Swiss have effectuated the release of 9,000,000 CRB dollars of United States Government funds at Shanghai (Legation’s 3905, June 1970) and that negotiations for reducing in effect the inequitable exchange rate are progressing (Legation’s 3583, June 5).

The great difficulties encountered by Fontanel in affording financial assistance in occupied China are realized. It is hoped, however, that [Page 1039] the obstacles interposed by the Japanese have now been overcome and that regular monthly payments to all qualified American nationals may continue uninterruptedly.

Recipients of financial assistance in occupied China should be asked at present to sign promissory notes only for local currency received and, more particularly, as evidence of the actual receipt by the individuals concerned of the assistance for which Congress has provided, but the accounts of disbursements to each recipient rendered by Fontanel should show both local currency and United States currency equivalents (Legation’s 3812, June 1571). Department’s 1202, February 14, 1942, as amended, contemplates that American nationals should in no event fail to receive financial assistance merely because they cannot foresee a time when they will be able to repay the sums advanced. The American nationals receiving financial assistance in occupied China may be assured that an equitable exchange rate for the local CEB currency will be the subject of determination by the Department at some future date, and that no demand will be made for settlement based on the present arbitrary and unrealistic relationship existing and over which neither we nor they have control.

Reference complaints respecting insufficiency amounts financial assistance, Department approves effective June 1st the recommendations made by Fontanel for uninterned nationals in occupied China reported in Legation’s 2662, April 26, but requests that he make appropriate recommendations for revision of the rates of payment if the negotiations reported in your 3583 are successful. Department is informally advised that relief payments for noninterned British subjects have been paid in occupied China on the scale recommended in Legation’s 2662, and payments of 2500 CRB dollars monthly have been made through the Red Cross in cash or in kind for each interned British subject.

Pending the receipt of recommendations by Fontanel respecting interned American nationals in occupied China, each may continue to receive not to exceed the equivalent of $110 United States currency monthly in cash or in kind, or both.

Department is awaiting information requested in the first paragraph of its 1765, May 20, and unanswered portion of its 1627, May 10.72

[Page 1040]

Department will arrange for the transfer to the Legation of the necessary funds as to which you will wish from time to time to inform it.

  1. Not printed; it stated that 9,000,000 CRB dollars represented one-half of United States funds held by the Swiss Consulate General at Shanghai (740.00115A PW/1223).
  2. Not printed; it reported that due to unforeseen difficulties, especially the absence of necessary authorizations of the Japanese Consulate General at Shanghai, Mr. Fontanel had been unable to effect relief payments for March, April, and May until June 6 and that “many recipients bitterly complained obligation sign promissory notes for amounts at rate 23.30 CRB dollars for one United States dollar because they thereby guaranteed reimburse large sums American money for local currency insignificant and insufficient for their needs.” (390.1115A/1790)
  3. Neither printed; they sought data regarding costs of financial assistance in China under the proposed scale of payments (711.93114A/75, 74).