800.20293/11–2645: Telegram
The Secretary of State to the Consul General at Shanghai (Josselyn)75
212. It is understood that FEA75a intelligence officer Bayne gave Shanghai copies of memoranda of conversations had in Oct with T. V. Soong regarding a proposed Sino-American intelligence organization to locate hidden strategic enemy assets and reveal continuing enemy economic penetration in China. Please send copies these memoranda Chungking if Embassy does not already have them.
Department is inclined to view American participation in such an organization unfavorably because of (1) possible embarrassment vis-à-vis our other Allies, (2) possibility that organization might use methods and engage in activities which we would not approve and (3) doubt that intelligence we obtained would be worth effort involved.
Department might however consider, if requested, loaning Chinese Government a technical expert with experience in Alien Property Custodian field to assist Chinese if they decide to go ahead with project.
Before taking any action Department desires comments of Embassy and Consulate General.