893.51/5–1447
Memorandum by the Director of the Office of Far Eastern Affairs (Vincent) to the Secretary of State
The attached letter and memorandum from the Chinese Ambassador60 were handed me last evening at six o’clock by the Counselor of the Chinese Embassy.
The memorandum is simply a restatement of what Ambassador Koo said to you when he called last week. The only thing new in the memorandum is contained in the final paragraph, which states that “details of the plan for the proposed loan are being prepared by the Chinese Government and will be submitted for the consideration of the United States Government when it becomes clear that the request for the loan is acceptable in principle to the United States Government”.
I do not believe that we can, at this time and with the limited information we have, inform the Chinese Government that its request for a loan of $1,000,000,000 is “acceptable in principle”. It seems to me that we must have not only much more specific and detailed information regarding the purposes and practicality of the loan, but also must have a clear understanding with Treasury, Eximbank and Congressional leaders before we can make any such commitment as the Chinese Ambassador requests.
I recommend that the attached memorandum be referred to Assistant Secretary Thorp’s office for study and that the Chinese Ambassador be informed orally that the Department is not in a position to make the commitment he desires, but that we are prepared to receive and give careful study to an informal memorandum from the Chinese Government setting forth and supporting in detail the purposes for which it wishes to borrow the $1,000,000,000.61