102.1/10192b: Telegram
The Acting Secretary of State to the Ambassador in China (Gauss)
249. For Adler from the Secretary of the Treasury. It was reported that in a conversation with Ambassador Gauss and others with Dr. Kung, Dr. Kung indicated that the Chinese Government through expenditures of CN$10 billion for United States military forces had repaid the $500 million United States credit extended to China (your 236, February 4).
Unless you or Ambassador Gauss perceive objections, please inform Dr. Kung that the United States Government regards the $500 million credit as an outstanding obligation of the Chinese Government and that fulfillment of this obligation is governed solely by article II of the March 21, 1942 Agreement.69 We do not wish to leave unchallenged the assertion of Dr. Kung that the Chinese Government has repaid this credit.
Please inform Treasury if the Ambassador or yourself feel that such action should not be taken including the reasons therefor and take no further action until so instructed. [Morgenthau.]
- For text of the agreement, see Joint Statement by the Secretary of the Treasury and the Chinese Minister for Foreign Affairs on March 21, 1942, Department of State Bulletin, March 28, 1942, p. 263, or Department of State, United States Relations With China (Washington, Government Printing Office 1949), p. 510.↩