893.51/6899
Memorandum by Mr. Joseph M. Jones of the Division of Far Eastern Affairs
An examination of the files discloses that the British Government has extended two types of financial assistance to China, one consisting of a contribution to a fund for the stabilization of the Chinese currency and the other consisting of commercial credits guaranteed by the Exports Credit Guarantee Department.
With reference to the contribution to a fund for the stabilization of Chinese currency, the British Government on March 8, 1939, announced that it had entered into an agreement with the Chinese Government to establish a Chinese currency stabilization fund and for that purpose had agreed to advance £5,000,000. (See Tokyo’s telegram No. 122, March 8, 3 p.m.,32 and the British Embassy’s aide-mémoire of March 7, 1939.)
[Page 668]In regard to the guaranty of commercial credits, an aide-mémoire of the British Embassy over date January 6, 1939, contained the statement that “The United States Government are aware that His Majesty’s Government have already allocated to China about £500,000 of credits which will become available when the Export Guarantee Bill is passed”. According to a report from the Assistant Commercial Attaché in London, the Export Guarantees Act 1939 went into effect on February 28, 1939.
The Commercial Attaché at Shanghai reported in a telegram of date April 14, 1939,33 that according to the press the British Exports Credit Guarantee Department had agreed to advance £3,000,000 to China in addition to the half million pounds previously advanced. There is no further indication in the files that this additional credit was in fact made available to the Chinese.
In a report entitled “The Exports Credit Guarantee Department” of date April 24, 1939,33 the Assistant Commercial Attaché in London stated that “prior to the passage of this act (the Export Guarantees Act, 1939) the only medium-term guarantees of any importance given in connection with China have been for trucks and lorries, intended mainly for use on the new line of communication from Burma”. It would appear then that certain credits to China were guaranteed prior to the passage of the Export Guarantees Act of 1939, but in as much as the Export Guarantees Act in effect prior to that time did not provide for credit guarantees “in the national interest” it is probable that these were more of the nature of ordinary commercial credits.
It appears then that the British Government has definitely lent financial assistance to China to the extent of £5,500,000. An additional credit of £3,000,000 may have been extended by the British Exports Credit Guarantee Department but there is no authoritative information in the files which would confirm this extension.