893.51/1–1846: Telegram

The Acting Secretary of State to the Embassy in China

117. For General Marshall. Further to Urtel 2241, December 29,38 to which paragraph numbers refer. Two and 2c, 3. Deptel 85, January 14, contains action of NAC taken 8 January, which implements [Page 923] your recommendations with respect to manner of extending substantial credit by Eximbank.

Two a, Deptel 103, January 17 contains action of NAC taken on 15 January. NAC policy would permit extension of credit to Chinese after satisfactory action by Chinese Government with respect to the prompt negotiation of a treaty of commerce and navigation. NAC action did not go as far as to require conclusion of treaty as prerequisite to extension of credit. (See also Deptel 2057, December 24,39 and 17, January 4.40

Two b, 1 and 2. The questions raised by you were considered by NAC on 15 January. NAC action is contained in paragraphs 1 (b) and (c) of Deptel 103, January 17. Pursuant to NAC action, China may be assured, when you believe it advisable, that technical advice from either or both of the International Monetary Fund or of proper agencies of this Government will be available.

New subject: Reference here is to paragraph b, Deptel 2089, December 29.41 Representatives of Department have conferred with other agencies and departments associated with NAC with respect to advisability of Eximbank tentatively setting aside or earmarking any particular amount to provide later Eximbank loan to China. Consensus of view here is that difficulties in estimating amount desirable for such credits and the timing of its extension, together with the existence of similar difficulties with respect to future Eximbank credits for other countries, make such a set aside inappropriate at present.