893.51/7743: Telegram
The Ambassador in China (Gauss) to the Secretary of State
[Received February 3—5:23 p.m.]
233. Minister [of] Finance has presented Chinese counterproposals which in effect provide that for each U. S. dollar we shall receive 20 dollars CN at official rate and China will add 10 additional dollars CN which shall be credited as reverse lend-lease. I informed Kung that while his proposal would be reported to Washington I was certain that it could not be considered reasonable or satisfactory and that while we are prepared to enter into reverse lend-lease agreement it seems useless to do so unless such agreement is implemented by a reasonable and realistic financial arrangement along lines contemplated in our proposals. This refers to our 189 of January 29; a more detailed report will follow.