893.51/7735a: Telegram

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

108. The following message from the President should be delivered to Generalissimo Chiang Kai-shek:

“I have carefully studied your recent message transmitted through Ambassador Gauss, and I fully recognize the extent to which China’s resolute war stand has rendered her economic situation acute. I am fully mindful of the importance of taking every practical cooperative step to make possible the most active prosecution of the war as well as to make possible an orderly development of industry and trade after the war.

I think it important that you should understand our special problems over here. I cannot escape the feeling that because of the distance between us there may be danger that we may fail adequately to work out our common problems and may rush into decisions which would not be in the interests of either of our peoples.

I think that your suggestion transmitted to me by Madame Chiang that Dr. Kung be sent to Washington is a good one. If he were here the various financial and economic problems involved in the situation could be fully discussed to the mutual advantage of both countries.

Meanwhile, I should like to make this specific suggestion: Just before receiving your message I had approved instructions to General Stilwell and to Ambassador Gauss to take up urgently with your Government the question of our military expenditures in China. I should like to suggest that an arrangement such as General Stilwell and Ambassador Gauss are authorized to propose be adopted tentatively on the understanding that our Army expenditures in China during the next few months can be expected to be somewhere in the neighborhood of 25 million U. S. dollars each month.

Recognizing the validity of your claim that your Government is not in a position to bear the financial burden of contributing to the maintenance of American troops in China, this Government is fully prepared to bear all costs of its war effort in China including housing as well as construction under the general arrangements that will be suggested by General Stilwell and the Ambassador. Roosevelt.”