893.5151/11–248: Telegram
The Acting Secretary of State to the Ambassador in China (Stuart)12
1645. Following for record is text telegram drafted Treasury Nov 9 but inadvertently delayed handling Dept:
“Dept and Treas considered proposal advanced as alternate A Deptel 1459 Oct 15 most preferable arrangement but authorized alternate B as measure to be adopted with agreement ChiGovt if acceptance alternate A proved impossible. (ReConGentel 2287 Nov 2 rpt Nanking 1731). However, if Emb and Treas Attaché consider reasonable time for consideration of original proposal by ChiGovt has elapsed and that there is no immediate prospect implementation agreement reported Embtel 202513 Emb authorized at its discretion make own local arrangements for acquisition gold yuan and give its sanction similar action by consulates. Suggested in this event all direct procurement be handled by Emb and Consulate financial officers in consultation Treas Attaché with staff members enjoined from individual local currency procurement.
Dept requests at least informal notification to ChiGovt of direct action, even though formal agreement not contemplated. Further, after arrangements direct procurement put into effect Emb should make every effort practicable in current market situation to reach agreement with ChiGovt for arrangement which would provide GY at rate satisfactory to Emb and by which foreign exchange would accrue to ChiGovt.”
Above authorization intended confirm arrangement Emb proposed ConGentel 2287 Nov 2. However, Dept realizes conditions have since [Page 435] gone bad to worse and notes Emb has authorized payment individuals U. S. dollar currency. Dept discussing such use dollar currency Treas but meanwhile sees no alternative present arrangements.