Office of the Historian

893.00/5–247

Memorandum by the Director of the Office of Far Eastern Affairs (Vincent) to the Secretary of State

[Washington,] May 2, 1947.

I had lunch alone last Tuesday, April 29, with Ambassador Koo. The conversation was devoted almost entirely to the matter of American financial assistance to China. He did most of the talking, and in the process he went over various and sundry types of assistance we might give, such as credits for approved projects, financing of exports to China, and a currency stabilization loan. He seemed to think that something might be done to persuade the Eximbank to change its attitude. He also showed interest in a special Congressional authorization of a loan. With regard to currency stabilization I pointed out to him how impractical it would be to establish a fund for this purpose as long as the situation required issuance of currency to make up the large budgetary deficit.

I am all but certain that the Ambassador when he calls54 plans to discuss with you financial assistance, and I believe that this will be the only subject he will want to discuss. In the course of the discussion he will, in all probability, ask your opinion of the recent reorganization of the Chinese Government, including the establishment of the State Council, the appointment of Chang Chun as Premier, et cetera.

I suggest that you express satisfaction over the changes in the Government and the hope that there will be practical results in the way of reform, an arrest in the deterioration of conditions, and re-establishment of confidence on the part of the Chinese people in their Government. With regard to financial assistance you might mention the fact we have been informed that the Chinese Government is now preparing a comprehensive request for assistance and that this request will be given thorough study when it is received in the Department.

In the event that you wish to familiarize yourself with the recent changes in the Government, there is attached a memorandum describing those changes and giving a brief statement regarding the individuals involved.55

  1. See memorandum by the Secretary of State, May 8, infra.↩
  2. Neither printed.↩