The Ambassador in China (Hurley) to the Secretary of State
[Received 6:30 p.m.]
1305. Due to the fact that Soong was completely engaged in the consideration of policies relating to Moscow and Potsdam24 (Deptel 1181, August 2, 5 p.m.25) it was impossible to discuss with him the views of the Department regarding the Yangtze Gorge project as outlined in your 1075, July 11, 7 p.m., until July 26. Soong stated he considered the position taken by the Department to be “fair” but, as financial assistance for construction of the dam might be forthcoming from other sources if not from America, he would have to consult with his advisers to determine whether or not it would be desirable to incur the expense of completing the preliminary plans at this time. He then asked that if China should decide she would like to complete the plans, would the Department authorize the Bureau of Reclamation [Page 1435]to proceed in accordance with the terms and conditions outlined by the Bureau and already accepted by Dr. Soong. We informed him we did not feel authorized to make the commitment but that the question would be submitted to you in reporting his decision.
We had expected a reply before Soong left for Moscow but he departed without giving it. Dr. Wong Wen-hao, Minister of Economic Affairs, intimated in conversation with Robertson yesterday afternoon that no decision would be reached until Soong’s return.
So far as we can determine, enthusiasm for this project, as envisaged by Savage, is largely confined to certain Americans. Such Chinese enthusiasm as has appeared to exist in Government circles has, in our opinion, been generated by the intimations indirectly, if not directly, that the U. S. would furnish the funds. We have discussed this subject with numbers of important Chinese whose judgment we value who have stated frankly they did not consider the project economically feasible for China at this time even though the necessary financial assistance could be obtained from U. S. or elsewhere.
Tsu-yee Pei, one of China’s ablest student[s] of economic conditions, expressed to Robertson the same views reported to us by Lock-hart,26 in his memo of June 14.27 Pei requests that his conversation with us be held in confidence to avoid embarrassment to him here. He is, as you know, financial advisor to Soong.
It is our opinion that we take no steps to accelerate a decision unless you have important reason for our doing so.