893.51/7734: Telegram

The Ambassador in China (Gauss) to the Secretary of State

122. In view of Chiang’s attitude as disclosed in his message to President (our 105, 106, and 108, January 16), no steps are being taken by Embassy or Army pending reaction at Washington to Chiang’s message in the light of any conversations at Cairo45 and/or war PXE [and?] national requirements. This refers to your 79, January 16, 6 p.m.

We have informed Army we believe problem resolves itself into suggestions [questions?] of major military and political policy; that from political point of view we feel that we should maintain firm position [Page 852] and that Chinese, because of present and future military and political dependence upon the U. S. will come to adopt realistic attitude so that we can reach agreement under which we will be in a position to finance our military expenditures in part by sale of currency, in part by sale of gold and in part by obtaining Chinese currency as reverse lend-lease, rate of exchange therefor to be left for future determination; that this will of course consume time and question whether our military operational plans will permit delay is for decision by War Department and the President. There seems to be no possibility of effecting change in official rate of exchange.

  1. For documentation on the Cairo Conference, see Foreign Relations, The Conferences at Cairo and Tehran, 1943.