102.1/7–1547: Telegram
The Ambassador in China (Stuart) to the Secretary of State
[Received July 16—4:08 a.m.]
1532. To State and Treasury from Adler. ReEmbtel 1463, July 4 and Urtel 845 of July 9. Arrived Shanghai July 8, returned July 15. On July 10 I had a further long discussion with Governor of Central Bank on silver, in which he informed me that he, K. P. Chen, Li Ming and Tsuyee Pei, who is now acting as Governor’s adviser, had been reviewing the whole financial situation and had decided that they must take steps to have a stock of silver coins on hand within approximately 3 months. He asked me to transmit the following formal request:
“In view of the time which will be necessary for making the dies and for the completion of other processes of coinage, would you be kind enough to inform the United States Mint to start at once the preparation for the coinage of our new silver money against a silver deposit with the National City Bank of New York, Shanghai? The initial installment of coinage will amount to 45 million ounces of fine silver. The new coin, I hope, will have on one side a portrait of Doctor [Page 1159] Sun Yat-sen and on the other side the Chinese equivalent for one yuan encircled by patterns including that of our national emblem of the 12-pointed star. The portrait of Doctor Sun is available at the American Bank Note Company in the United States.”
The coin’s specifications are: gross weight of 14 grams or .45 ounces, .720 fineness, net silver content of 10.08 grams or .324 ounces, copper 3.92 grams or .126 ounces and a diameter of approximately 31 millimeters. It was further suggested that if in the Mint’s opinion the fineness can be reduced without changing its color and without necessitating use of nickel and zinc a larger coin with the same net silver content would be preferred.
The Governor said the Central Bank had 45 million ounces of silver on hand which it could turn over to National City Bank, Shanghai, for transfer to Treasury to replace the silver advanced by Treasury. He added that the whole matter was one of some urgency and that Central Bank would like to have the first installment on hand in Shanghai within 3 months. He indicated that the Central Bank would of course pay all cost involved.
He admitted that 45 million ounces would be far from sufficient to provide the requisite coinage for the new currency and asked if the Treasury could facilitate the acquisition by China from Mexico of 50 million ounces of silver which the Bank of Mexico now has in its vaults and the 60 million ounces the Bank of Mexico expects to obtain within the next 6 months from current production. When I asked what terms he contemplated for this transaction in view of fact that Mexico would not sell silver except for cash, he became vague. (For your information I learned later that Governor has asked Urquudi [of] Bank of Mexico who recently visited China to cable Mexico on possibility of a Mexican credit to China for purchase of silver and that Mexico turned down Chinese request.) He also repeated possibility reported in Embtel 1463 of July 4 of a “purchase” of 100 million ounces from the United States, suggesting that China make her payment for the silver over a period of 10 years, and that part of payment be made in Yunnan tin.
Governor then informed me that S. D. Ren, vice president of Universal Trading Corporation,5 was leaving for United States in the next day or two and would phone Treasury long distance from San Francisco to ascertain whether he should come to Washington immediately for consultation on design of new coinage.
I pointed out to Governor that step he was taking was a very serious [Page 1160] one and that further discussions with him and his advisers were desirable before I transmit his formal request to Washington, with which suggestion he readily agreed. [Adler.]
- An official Chinese agency incorporated under the laws of the State of New York on October 18, 1938. Its chief functions were to market tung oil and other Chinese products in the United States and to act as purchasing agency in the United States against Export-Import Bank credits to China.↩