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

No. 1094

The Ambassador has the honor to refer to the Department’s telegram No. 1101, September 3, 4 p.m., and to the Embassy’s telegram [Page 1382] No. 2016, October 2, 6 p.m., both with regard to the future operation in the United States of the Universal Trading Corporation, a Chinese Government concern with head office in New York.

There is now enclosed34 a copy of the Embassy’s note to the Ministry of Foreign Affairs No. 1180 of October 6, 1947, transmitting a copy of a memorandum embodying the information contained in the Department’s telegram under reference. As indicated in this note, and also in the Embassy’s telegram cited above, the information in this memorandum had previously been made available to Dr. Chang Kia-ngau, Governor of the Central Bank of China.

The Ministry, in note No. Mei–36/23317 dated November 1, 1947, a translation of which is enclosed, stated that the “competent authorities” of the Chinese Government assertedly have no intention of making any change in the functions and operations of the Corporation. As this stand was altogether contrary to statements made October 2 by Dr. Chang to two officers of the Embassy, the substance of which was reported in the Embassy’s reference telegram, the response from the Ministry was referred to him. Dr. Chang stated November 7 to an officer of the Embassy that the Ministry’s note presumably had been written by Dr. Tung Ling, Director of the American Affairs Department, and that he (Dr. Chang) would discuss the matter with Dr. Wang Shih-chieh, the Foreign Affairs Minister, who was not acquainted with the background. As the Department is probably aware, Drs. Chang and Wang are close personal and political friends.

Dr. Chang stated further that neither he nor K. P. Chen, President of the Universal Trading Corporation and also Chairman of the Foreign Exchange Equalization Fund Commission, had been consulted by the Ministry in this regard. He said that he and Mr. Chen were completing a draft plan for the future functions and operations of the Corporation along the lines outlined in the Embassy’s telegram under reference.

The Embassy will expect to report further on this subject.

  1. Enclosures to this despatch not printed.