102.1/10321f: Telegram
The Secretary of State to the Ambassador in China (Gauss)
Washington, March 11,
1944—11 p.m.
331. For Adler from the Secretary of the Treasury.
- 1.
- The Treasury has been informed that Ambassador Gauss in cable dated March 8, 194479 has reported that the cumulative impact of our present and projected military activities may threaten China’s economy with collapse and that such economic collapse may have the disastrous result of making it physically impossible to carry out our military projects and plans.
- 2.
- Treasury is, of course, deeply concerned with the economic situation in China and with the matters raised in the Ambassador’s cable. Therefore, please cable Treasury immediately your own evaluation of the economic situation in China from an economic point of view, with particular reference to the effects of our present and projected military activities. We would be especially interested in your judgment on the relative importance of our military expenditures in bringing about the rapid rise in prices as compared with the other causes of inflation and on the imminence of an economic collapse. Be as specific as possible and as comprehensive as time permits. [Morgenthau.]
Hull