Office of the Historian

893.5151/9–2145: Telegram

The Acting Secretary of State to the Ambassador in China (Hurley)

Washington, September 21, 1945—8 p.m.

1520. For Adler and Casaday from the Secretary of the Treasury.

Part I. On September 14, Secretary of Treasury sent the following letter to Dr. Soong:

“American business men with interests in China, who are planning to leave for China in the very near future, have requested us to raise with the Chinese Government the question of the rate at which they will obtain Chinese local currency for U. S. dollars. They strongly maintain that it would be most unfair if they are compelled to operate on the basis of the present official exchange rate and feel that some arrangement with them should be made which would be more equitable. [Page 1158] I appreciate the difficulties involved in this matter but strongly urge that some arrangement be made at once which would meet the needs of these business men. I am sure that you agree with me that their early return to China for the purpose of the resumption of their business there is in the best interests both of China and the United States.”

Part II. In reply to this letter Mr. Pei on September 18 called at the Treasury and suggested that for the time being the overseas Chinese rate of CN$500 to US$1 be given to American business firms with the proviso that all requests for funds over the equivalent of US$1,000 per month would require special approval of the Ministry of Finance.

Treasury indicated that this proposal would be acceptable for the present. It was made clear to Mr. Pei that it was essential that some provision be made to meet the needs of American business firms returning to newly liberated coastal cities of China and that if some acceptable arrangement was not entered into immediately the Treasury would probably interpret its outstanding action guide permitting the sale of blocked dollars by U. S. business firms in China to reputable Chinese to apply to the newly liberated areas of China.

Part III. Mr. Pei is submitting his proposal for a CN$500 to one rate to O. K. Yui. Please call on Yui and urge upon him the necessity for immediate action in this field. [Morgenthau.]

Acheson