893.4061 Motion Pictures/354

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

No. 2389

Sir: With reference to my despatch no. 1982 of January 3, 1944, and to the Department’s telegram no. 355, March 18, 6 p.m. and my reply no. 507 of March 22, noon, regarding remittances to the United States by American film distributors in China, I have now the honor to enclose:6

1.
Copy of a letter dated March 4, 1944, from the Minister of Finance.
2.
Copy of my reply dated March 31, 1944.

With the discontinuance of operations by the Stabilization Board there was considerable delay in the granting of facilities for the November and December, 1943, remittances by the film distributors. This matter was followed as closely as possible by the Embassy, but it was deemed desirable not to make it the subject of official representations for the reason that there were sound indications that the delay was due to the confusion attendant upon the transfer of authority from the Stabilization Board to the Foreign Exchange Commission and that the remittance facilities would in due course be made available as heretofore. By the date of my telegram of March 22d, all eight American film distributors in China had finally obtained the necessary facilities for their November-December 1943 remittances.

As to the matter of increased remittance facilities—the request of the film distributors for 100% remittance facilities—I did not deem it wise to press the Minister of Finance for a reply to my letter of January 3, 1944 (enclosure no. 1,7 my despatch no. 1982 of January 3, 1944 to the Department) while the question of November-December remittances was unsettled.

Under date of March 4th, however, the Minister of Finance wrote me (enclosure no. 1 with this despatch) and indicated a willingness to make available for monthly remittance by the eight American film distributors the sum of $25,000 U. S. currency. This proposal obviously was unacceptable, since it decreased by about 50% the present facilities enjoyed by the film distributors. But the proposal [Page 1038] was brought to the attention of the film distributors for their consideration and reply, and request was made for detailed information upon which the Embassy might ask for reconsideration of the whole matter by the Finance Ministry.

After the usual delay, information has finally been forthcoming from the film distributors, and under date of March 31st I have again addressed the Minister of Finance (enclosure no. 2 with this despatch), presenting the case of the film distributors and requesting continuance of the present 50% remittance facilities, with such additional facilities as may be possible to permit the full remittance of film rentals to the suppliers and the gradual remittance of the backlog of unremitted earnings, so far as they represent funds due to the suppliers.

By way of comment, I should like to say to the Department that the film industry in the United States is receiving its remittances from China at the extraordinary fixed exchange rate of 20 to 1, whereas the open market rate for the U. S. dollar in China is approximately 200 to 1. It is, therefore, somewhat difficult for observers here to have great sympathy with the request of the film distributors that they shall be permitted 100% remittance facilities at the official rate of exchange.

Not one of the American film distributors is represented in China by an American citizen. The alien representatives of the distributors assert that they are not fully informed on the pre-war operations, arrangements, profits, et cetera, of their companies; they are unable to give me any information on which I can build sound arguments for presentation to the Ministry of Finance in support of their request for 100% remittance facilities. It would be helpful if the Hays organization in the United States would prepare and transmit to the Embassy through the Department a full presentation on this subject.

Respectfully yours,

C. E. Gauss
  1. Enclosures not printed.
  2. Not printed.