893.50 Recovery/10–1948: Telegram
The Ambassador in China (Stuart) to the Secretary of State
[Received October 19—12:03 a.m.]
1930. For Lapham and Casaday. Embassy intended but apparently failed to make clear that action recommended reference ECA program in its 1748 of September 22 was only step (a) listed in second paragraph Deptel 1433, October 12. In light position reported taken by Administrator against any January deficiency request in this, door appears effectively shut.
Embassy was familiar with Department position regarding silver loan for currency stabilization. Our thought, however, was not silver loan for currency stabilization but a suggestion for emergency and interim bolstering of Nationalist soldiers’ will to fight by provision troop pay and army procurement in traditional hard money form. However, absence authority and funds for such purpose as reported in your telegram under reference likewise appears to rule out this possibility.
Reference final paragraph urtel under reference, Embassy and Treasury Attaché have been attempting to keep Washington fully informed developments in currency picture.
Tempo of events has been too rapid to lend value to any detailed analysis new financial measures. Moreover, such study seemed unnecessary in light our considered judgment at outset and subsequent repeated belief that prospects of success new currency were nil once brief honeymoon was over.
Please pass to Treasury and ECA.
Sent Department, repeated Shanghai 951.