893.51/7768
Memorandum of Conversation, by the Ambassador in China (Gauss)90
During a call on me this afternoon, Sir Horace Seymour90a mentioned that word had just been received by him of the conclusion of the conversations between Britain and China in reference to the 1942 loan of 50 million pounds to China. So far as he knows all that remains now is to sign.
Outlining the understanding—which he said had been communicated to Washington—Sir Horace said that it did not differ substantially from the original British proposals, i. e., a loan for war purposes, to be used within the Sterling area, during the period of the war. He added that the understanding does, however, provide for the setting aside of 10 million pounds Sterling to be used by China as security for a bond issue (but commented that the terms of such a bond issue must be discussed between Britain and China.) He said that there is also provision that a certain amount of the loan may be used for [Page 915] the printing of banknotes; and added that it has been agreed that orders for goods or equipment placed by China before the termination of the war, to be paid for out of the loan, would continue to be payable out of the loan fund even if the war should terminate before the supplies are delivered.