893.51/6–744
Memorandum of Conversation, by the Assistant Chief of the Division of Chinese Affairs (Meyer)
| Participants: | Mr. Bell, Under Secretary of the Treasury, Mr. White and others from the Treasury |
| Major General Clay and Colonel Foster from War Department | |
| Messrs. Meyer, McGuire, Collado, Luthringer from Department of State. |
Reference memorandum of conversation of May 26, 1944.
A further meeting was held in Mr. Bell’s office in the Treasury Department at 11:30 this morning concerning recent developments in connection with the matter of arrangements to be made with the Chinese Government for the financing of United States Army expenditures in China. Mr. White of the Treasury submitted a draft of Mr. Morgenthau’s proposed reply to Dr. Kung’s letter of April [Page 927] 19, 1944. This draft was along the lines indicated in my memorandum of May 26, 1944, but was withdrawn by Mr. White in view of Dr. Kung’s anticipated visit to the United States in connection with the international monetary conference.
General Clay then read a telegram he had received from the Army representatives in Chungking in which they proposed that no further monthly payments be made by the United States Government as they felt that such payments would undermine their position in connection with these negotiations.
There followed a general discussion of the subject and in the light of Dr. Kung’s anticipated early arrival in Washington the Army and Treasury representatives present at the meeting composed a reply to be sent by the Army to its representatives in Chungking in substance informing them that it was proposed to take up this matter with Dr. Kung upon his arrival in Washington along the lines previously indicated and that no final settlement would be made without first referring the matter to the concerned American representatives in Chungking.
I took occasion at this point to state that the Department was interested and concerned in regard to the manner in which this problem was to be settled as it is only one of several problems now pending between the Chinese and American Governments. In some instances the decision might not be to the liking of the Chinese Government and the cumulative effect of the decisions arrived at in these various problems upon Sino-American relations was something which must be taken into account in connection with the decision arrived at in any one of them. I pointed out in this connection that the Chinese Government was currently supplying Chinese notes to the American Army in China apparently on the supposition, whether correct or incorrect, that a sum of money in U. S. currency would currently be deposited by the American Government to the credit of the Chinese Government. If such payments by the American Government were not now forthcoming it would probably raise doubts in the minds of the Chinese as to the motives of the American Government. Mr. White did not consider this point of particular importance and suggested that it might even redound to Dr. Kung’s prestige if at the time of his visit to Washington the $50,000,000 now considered by the Chinese to be due them for the notes supplied during April and May could be paid to him at that time. Mr. White stated that at least he would have this sum to take back to China with him if he didn’t get anything else.
The meeting broke up in a rather indeterminate manner but the impression was received that negotiations in this matter were to be transferred from Chungking to Washington and that responsibility would presumably be assumed in the matter by the Treasury. The proposal [Page 928] to refer final arrangements after discussions with Kung to the Army and other representatives in Chungking may be a necessary move in view of the fact that previous negotiations have been conducted there but it was also suggested by Treasury and Army representatives at the meeting that this might (also) be advantageous in the event that a further delay in the settlement of the problem were later considered desirable.