124.935: Telegram
The Acting Secretary of State to the Ambassador in China (Stuart)93
1459. From State and Treas. Complicated formulae suggested for possible future negotiation re embtel 1817 Oct 2, also your tel 1901, Oct 1394 appear likely to create cumbersome and protracted problems of rate determination for each individual transaction, especially as it is contemplated that procurement be centralized in Shanghai. Decentralization of procurement and use of a simple procedure considered possible of negotiation at proper time in view procurement arrangements in effect for North China posts prior to August currency conversion. State and Treas fully sympathetic with wisdom advance authorization to meet possible contingencies of break in currency and authorize Embassy within its discretion as to proper timing to negotiate arrangement as follows:
- A.
- Purchase in each city from Central Bank branch or agent of local GY requirements at rate equivalent to 95 percent of local open market rate for dollar drafts, or if above inacceptable,
- B.
- Direct purchase in each city in open market of local GY requirements, using dollar drafts or, if necessary, dollar currency.
You should urge acceptance of a above because foreign exchange accrues to Government.
[Page 422]Implications for ECA special deposit account will be subject subsequent cable.95
Embassy and Casaday comments requested. [State and Treas.]
- Repeated to the Consul General at Shanghai as telegram No. 1776.↩
- Latter not printed; it reported an informal agreement with the Governor of the Central Bank of China to permit the Consulate General at Mukden to make its own local exchange arrangements (124.05/10–1348).↩
- Not found in Department files.↩