893.515/1–747: Telegram

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

65. From State and Treasury for Ambassador and Adler. Recommend immediate official request to Chinese for special rate for War and Navy purchases of CN dollars approximating open market rate for US dollar currency on date of purchase or based on selling price of gold (Embtel 32, Jan 7). Suggest stressing inadequacy of available appropriations to finance existing programs at official rate, and difficulty of explaining to Congress request for deficiency appropriations to cover abnormal costs due to overvaluation of yuan. Recommend Emb continue to press for special rate arrangements even in event official rate is adjusted (Embtel 48, Jan 107) since War and Navy have agreed to postpone sale of dollars in open market only on basis of assurance from Dept that Emb would press for permanent arrangements insuring availability of yuan to US Army and Navy at reasonable cost at all times.

Re last paragraph Embtel 32, Jan 7, Emb should not discuss Eximbank8 loan or post-UNRRA9 grant10 in connection these negotiations. Status these matters does not permit encouraging Chinese expectations. Refer Deptel 54 Jan 14,11 re status $30 million transfer under Aug 30 surplus property agreement. [State and Treasury.]

  1. Not printed; it indicated an adjustment in the official exchange rate was being considered (102.1/1–1047).
  2. Export-Import Bank of Washington.
  3. United Nations Relief and Rehabilitation Administration.
  4. For correspondence on post-UNRRA grants to China, see pp. 1293 ff.
  5. Not printed.