Office of the Historian

893.51/7760: Telegram

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

Chungking, March 26, 1944—9 a.m.
[Received March 26—9 a.m.]

531. 1. Headquarters sent March 25 to War Department for Somervell and Clay telegram (which we have requested be copied to State and Treasury)85 requesting authorization to explore in informal discussion with Kung a new approach to the question of financing our military expenditures. We do not, of course, know whether Kung and Generalissimo will be more receptive to this approach than to previous ones but we believe it may offer an opening for a possible solution from the Chinese point of view, especially as it would accomplish the vitally important consideration of saving the Generalissimo’s face in regard to the question of official exchange rate. We need not endeavor to impress upon Department how concretely and overridingly important considerations of face are to Chiang or to Chinese in general. These are considerations which may not be fully comprehended by War and Treasury officers who have not previously been confronted with the peculiar difficulties of dealing with the Chinese and we accordingly express earnest hope that suggested approach will be given Department’s support, at least as basis for further discussion with Kung.

2. This telegram is sent urgently in order to communicate above information and comment to Department. The question of endeavoring to reach final agreement with the Chinese should not, in our opinion, be rushed at this particular time. If our understanding of the military factors involved approaches correctness, the essential thing is to get the air fields and other installations constructed and in operation. Construction is now going forward and so long as the Chinese continue to advance funds for that purpose and the work advances at reasonable speed, it might not be to our disadvantage if definitive showdown on question of conversion rate is avoided until construction projects have been completed. The principal and most urgently required fields will probably, we understand, be finished by middle of April and discussion with the Chinese of the proposal suggested by Headquarters would help carry us up to that time.

Gauss
  1. In telegram No. 532, March 26, 4 p.m., the Ambassador reported that this message was delayed until March 27 (893.51/7761); copy of message to the War Department not found in Department flies.↩