893.51/7712
Memorandum by the Chief of the Financial Division (Livesey)
Mr. Berle is on leave and not due back until August 16. Otherwise, I think this letter would be all right to initial as a sequel to his letter [Page 444] of July 13 which stated that he expected to communicate further with Mr. White with regard to the entire matter at an early date. However, the actual content of the letter is very slight. The stated purpose of China in importing gold being to mop up surplus currency, the gold should not be sold to government banks which might finance the purchase by issuing additional paper currency. Similarly, the suggestion that the importation be stopped if it proves not to be working well, is fairly self-evident.
Without inquiry, I assume that these ideas have been mentioned by the Treasury in their conversations with the Chinese. How far the Treasury can go in emphasizing them is another matter.
If Adler’s suggestion that no gold be sold at less than eight thousand Chinese National dollars per ounce is followed, we have Dr. Tsiang’s estimate in Chungking’s 126059 that the equivalent of $35,000,000 American money in gold could be sold, leaving $165,000,000 of gold which could be sold only at a lower price. China may not work to Adler’s minimum price specification, or Tsiang’s estimate may be wrong.
With Messrs. Berle and White away I think the Dept. might forego written comment to the Treasury on this matter.