893.51/6–1347
The Under Secretary of State (Acheson) to Senator Homer Ferguson
My Dear Senator Ferguson: With reference to your letter of June 1389 on the subject of the disposition of the $500,000,000 loan to China, it is suggested that you may wish to reply to your correspondent along the following lines:
This Government has no information which would support the statement that China used a portion of the United States $500,000,000 loan to pay off interest and some principal on a British railway loan. The records of the Government indicate that as the Chinese Government made successive withdrawals against the credit we were informed of the manner in which such funds were to be used. A recapitulation indicates that the $500,000,000 credit was distributed for the following uses:
| $ Million | |
| Redemption of United States dollar security issues | $200 |
| Gold purchas | 220 |
| Purchase of bank notes | 55 |
| Purchase of raw cotton | 13.5 |
| Purchase of textiles | 11.5 |
| $500.0 |
Sincerely yours,
- Not printed.↩