The Counselor of Embassy in China (Smyth) to the Secretary of State
[Received 11:15 a.m.]
247. From General Marshall: Procedure proposed in your 1 is acceptable to me. (Reurtel 217 of February 4.) However, if negotiations are begun at the end of February it might be desirable to stall along for a few days to give me time to see what progress the meeting of the Central Executive Committees of the leading parties scheduled to take place at the beginning of March61 are making to enable me to make a definitive recommendation to you on the basis of such progress.
- It is essential in my opinion that Eximbank should be in a position to make a half billion dollar loan available to China at the [Page 936] appropriate time. At the same time it is not desirable before further progress has been made in China for Eximbank publicly to ask for the earmarking of a half billion specifically for China. Would appreciate it if you could avoid both horns of dilemma, though I realize that such a procedure would be very difficult to follow before Congressional Committee. To put it another way, if a delay in approaching Congress now will involve a still greater delay in obtaining the necessary authority, in that case I would agree to a frank presentation to Congress.
- Would you have any objection to my informing the Chinese of substance of your 2 a, b, c, and d at the appropriate time? [Marshall.]