893.4061 Motion Pictures/7–1345: Telegram

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

1161. In view of 20 to 1 exchange rate, increased business, and the economic necessity of protection foreign exchange assets, Finance Minister’s position has been that the proposed 10% remittance rate was eminently fair to United States distributors. (Re Department’s telegrams 900, June 12, 5 p.m. and 1012, June 29, 1 p.m.9)

However, as a result of negotiations, Finance Minister agreed this afternoon to permit a remittance of 15% effective immediately. We had hoped to reach a compromise at 20% but, under the circumstances, we are inclined to believe that this is the best that can be done.

In agreeing to submit proposal, we obtained assurance that should there be a change in the official exchange rate, adjustment would have to be made accordingly. Open market rate for United States dollars is now approximately 3,000 to 1. For the Department’s information, we are advised that the question of changing the official rate will be considered upon Soong’s10 return from Moscow.

Please advise if we are authorized to confirm the above proposal.

  1. Latter not printed.
  2. Dr. T. V. Soong, President of the Chinese Executive Yuan (Premier) and Minister for Foreign Affairs.