893.24/2–348: Telegram
The Ambassador in China (Stuart) to the Secretary of State
[Received February 4—9:01 a.m.]
213. In compliance with Deptel 144, January 28, 7 p.m., we delivered note Foreign Office today to George Yeh, Vice Minister, stressing need for immediate acceptance of refund of $1,800,000 and cancellation contract for automotive spare parts. Yeh said he would take matter up immediately with Prime Minister and endeavor expedite authorization Bosey, Shanghai, accept refund and cancel contract. Difficulty was, he said, that money had been appropriated and if refund was accepted without special arrangements money would have to be covered into Treasury and reappropriated before it could be used for other purposes. Government agencies concerned were very anxious to avoid this and find some way of leaving money in US where it could be re-expended. This desire to have money available for re-expenditure appears to have been prime motive behind Chinese refusal hitherto to accept refund.