893.516/629a: Telegram
The Secretary of State to the Ambassador in the United Kingdom (Kennedy)
479. The Department desires that you approach the British Foreign Office and orally and informally make a statement along lines as follows:
The British Government has in the past expressed its views that cooperation among foreign banks in China is desirable. For this reason the American Government desires to call to the attention of the British Government three instances in which British banks would seem to have acted in a manner which American bankers have felt did not conform to that spirit of cooperation which they have been endeavoring to maintain.
The manner in which the new Chinese exchange policy was put into effect on June 752 by the Stabilization Committee, upon which are represented two British banks, has created an unfortunate impression upon American and other banks which have been endeavoring to cooperate with the exchange control. American bankers in China do not quarrel with the decision for a change of exchange policy by the control authorities but they learned of the new exchange policy only when one of the foreign banks applied to the control authorities and was told that no exchange was being sold. In view of the cooperation which American banks have demonstrated in the past toward the exchange control authorities it would appear that those banks are entitled to a greater degree of consideration and cooperation on the part of those authorities.
Our reports indicate that early in the month of March British banks in north China announced their attitude in regard to the trade and exchange control measures instituted by the local authorities and then without having first consulted American banks sought to bring pressure upon American banks to adopt the same attitude.
At Shanghai, notwithstanding reported promises of the manager of the Chartered Bank as the senior British bank that the British banks would consult American banks with a view to maintaining a common policy in regard to acceptance of the new Huahsing Bank notes, American banks were not even informed of the decision of the British banks not to have anything to do with the Huahsing Bank or its notes until the decision became generally known to the customers of the British banks on May 1.
American banks in China have not protested against the foregoing acts of British banks in China but it is our understanding that the American banks feel that those acts have not been in conformity with a spirit of cooperation.
- On instruction of the Stabilization Committee, the banking agents of the Chinese Stabilization Fund in Shanghai refused to sell foreign exchange for Chinese currency. This withdrawal of support resulted in a fan in the exchange value of that currency.↩