Foreign Relations of the United States, 1947, The Far East: China, Volume VII

102.1/7–1647: Telegram

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

Washington, July 16, 1947—7 p.m.

874. For Adler from State and Treas. Navy reports July 8 that Shao of Central Bank [of] China informed Casaday, Maj. Johnson⁸ and Lt. Milliren⁹ that Central Bank unwilling to provide more than CNC 29,000 to $US 1, insists on renegotiation, and desires to sell at official rate only. Request your views on Shao’s complaint (ComNavWestPac¹⁰ 080505Z July 8¹¹). Indicate whether agreement can be considered still in force, also your views on resumption of renegotiation.

In the event that renegotiation of Hong Kong cross-rate agreement necessary, following procedure may be appropriate, subject to further checking in Washington. Views of Ambassador and yourself requested.

1. Resumption of negotiation with the Central Bank on a new cross-rate agreement or alternative, during which time Marine CNC proceeds will be used at the cross-rate.

2. Then indicate to Chinese after reasonable period that, unless agreement is reached before exhaustion Marine CNC, US will be forced to take appropriate alternative financial measures. [State and Treasury.]

Marshall

8. Possibly Maj. Richard K. Johnson, Army Advisory Group Finance Officer.
9. Lt. Howard C. Milliren, Disbursing Officer, United States Naval Port Facilities, Shanghai.
10. Commander, U. S. Naval Forces, Western Pacific.
11. Not found in Department files.