740.00115A PW/12–2644: Telegram

The Chargé in Switzerland (Huddle) to the Secretary of State

8341. American Interests—China. De Pury this afternoon discussed with MacKillop, British Counselor, Van Lynden, Dutch Secretary, [Page 1079] and Tait following proposal in order obtain reaction three Governments concerned (Legation’s 7386, November 7; 8216, December 18; and 8321, December 2445):

Swiss proposal is that future relief Shanghai not exceed amount for December (approximately 13,000,000 Swiss francs) for relief about 8,000 British, 2,000 Americans and 300 Dutch. Such additional needs as might be necessary to be purchased by Fontanel on open market.

In pointing out possible results, De Pury indicated that while Japanese might consider fictitious rate thus far effective constitutes sufficient face-saving and consequently that they might possibly be inclined to tolerate open market transactions as indicated above, should, on the other hand, this not be so and they learned of Fontanel’s purchasing open market, following would doubtless occur:

(1)
Fontanel’s position would undoubtedly be seriously compromised.
(2)
Japanese might stop all further relief.

De Pury stated January 1945 requirements for United States nationals alone amount to 4,590,000 Swiss francs. He said Swiss prepared to accept possible compromise Fontanel’s position and while probable Japanese would ultimately learn should his proposal be placed in effect, this would doubtless provide some months relief from present increasingly difficult position.

Representatives all three Legations inclined accept Swiss proposal. Please telegraph urgently instructions.

Huddle
  1. Telegram 8321 not printed; it reported that Mr. Fontanel’s budget for relief expenditures in January 1945 amounted to 50,020,000 CRB dollars, a figure based on an 80% increase in the cost of living during December. This budget was approved by the Department in telegram 167, January 11, 1945, 9 p.m. (740.00115A PW/12–2444)