124.935: Telegram
The Secretary of State to the Ambassador in China (Stuart)
607. Reports received by Dept from Shanghai, Peiping, Tientsin and Hankow indicate urgent need for securing reasonable exchange rate for CNC for salaries both alien and American personnel as well as all U. S. Govt operating expenditures in China. Immediate reply to Deptel 578, May 14,63 requested. If arrangements for drawing CNC under surplus property agreement at Hong Kong rate cannot be completed immediately, suggest Emb request Central Bank and its branches give Hong Kong rate on all official drafts and checks presented by U. S. Govt disbursing officers pending completion surplus currency arrangements.
Emb may explain to Chinese authorities that Dept desires do everything feasible to channel all dollar exchange transactions through Chinese Govt, and has in past sustained substantial financial losses in doing so, but under conditions now existing in China it is no longer administratively or financially feasible for Dept to meet problems its employees by salary and allowance adjustments. If Dept is to continue using official channels, reasonable rate continuously reflecting real value CNC must be made available.
Inform Consular offices under your jurisdiction.
- Not printed; it inquired whether the Hong Kong crossrate would apply to surplus property yuan drawn by the Embassy as well as to expenditures by the Army and Navy if it were accepted by the Chinese. In telegram No. 1101, May 21, 8 a.m., the Embassy reported agreement with the Governor of the Central Bank to apply this rate to property acquired under the Surplus Property Agreement (811.5293/5–2147).↩