102.1/10–2847: Telegram
The Ambassador in China (Stuart) to the Secretary of State
Nanking, October 28,
1947—noon.
[Received October 28—7:33 a.m.]
[Received October 28—7:33 a.m.]
2150. To Treasury from Adler. ReEmbtels 1788 of August 23, and 2147, October 28.
- 1.
- Informed by reliable source that Hsi Te-mou has been negotiating with Mexican Govt for credit of U. S. dollars 10 million for purchase of 14 million ounces of silver, credit to be guaranteed by an American bank, which would require unhypothecated deposit of 10 million dollars by Central Bank with it, as with part cotton credits. Presumably American bank Central Bank has in mind is National City. Understand that negotiations with Mexican Govt well advanced and contract almost ready for signing but as result of Beteta’s statement Central Bank has now instructed Hsi Te-mou to submit contract to Central Bank for its examination. Central Bank has been canvassing minting possibilities in India and England.
- 2.
- Character of proposed credit involves further depletion of coin as foreign exchange assets at time when they should be conserved to meet China’s unfavorable balance of trade on commercial account and essential Govt purchases abroad. Therefore, whole scheme is ill-advised and is explicable only by Gimo’s stubborn determination to have a stock of silver on hand in case of emergency and as a desperate gamble on the chance that should China commit herself to some form of silver currency a U. S. silver loan would somehow or other be forthcoming. [Adler.]
Stuart