Nanking Embassy Files, Lot F79, 820 Surplus Property: Telegram
The Consul General at Shanghai (Josselyn) to the Embassy in China
47. Transmitting message from Johnson, Foreign Liquidation Commission, for Adler:67
In a letter to you Soong has written that in view of the need for husbanding China’s foreign exchange resources the greater part of which will have to be reserved for currency stabilization he regrets that his Government is unable to consider any terms other than what would correspond to the West China Settlement,68 that is, 20% in [Page 1066]cash and the balance for repayment over a period of 30 years’ time.
Soong’s representative stated in conversation that he, Soong, is willing to buy the entire Calcutta stockpile on the above quoted terms which, with the addition of transportation, will amount to approximately 32 million dollars. This is 100% recovery. If Soong will not make an all cash offer even at 20% discount for cash, I am inclined to recommend if at all possible that the Calcutta stockpile be sold to the Chinese Government at 3c terms with down payment of 20 or 25% cash. Principal reasons for this recommendation are (a) China’s need for these supplies and our need to be rid of them in order to meet plans for the Burma-India demobilization, (b) China is a prospective customer for considerable surpluses including a large amount of water craft, Admiral Mar’s large order for shipbuilding and dock rehabilitation,69 and others, China has furnished us large want lists for other surpluses, (c) if through this Calcutta deal we can set the overall plan and terms for the sale of any and all surpluses to China we are in a position to go forward now and dispose of a great deal of surplus.
Should Soong’s tentative offer meet with Treasury approval, it would be my suggestion that there be added to the deal if possible the clause providing that the unexpended part of the C. N. debt be used to take up the 3c debt along the lines we were proceeding on in November.
Letter follows, please reply as soon as possible. [Johnson.]