893.516/697: Telegram
The Second Secretary of Embassy in China (Paxton) to the Secretary of State
[Received 5:45 p.m.]
111. Nanking’s 110, October 23, 2 p.m.,28 establishment of the new central bank.
Yesterday evening in informal conversation with Hsu Liang, Vice Minister for Foreign Affairs, and Chen Chih Shih, Vice Minister of Finance, the latter stated that preparations had in fact progressed to the point where it was hoped to establish the bank some time in November, but definitely not before the 20th. He remarked that the opening had already been delayed more than 2 months after the time originally planned.
He said that the capital was to be 200,000,000 dollars Chinese national currency, of which more than half was in hand, with certain Japanese assistance, in foreign exchange (American and British). There was also a vague reference to “commodities” as additional backing but no details were forthcoming on this point. It was stated that the value of the proposed new currency would approximate that of fapi with the implication that probably an attempt would be made to keep it a little higher.
[Page 545]He was informed that it was believed that the American Government would not welcome the issuance of another currency in China at this time. I emphasized that I was speaking informally and not under instruction, but both men were most cordial, agreed to do what they could to this end, as they declared that American good will was of the utmost importance. However, they were interested to learn specific reasons for the American Government’s opposition which they said would strengthen their hands in attempting to prevent or postpone action and would be used [as?] their own in discussions with other officials.
If the Department desires these informal negotiations to be continued here, supplementing those at Tokyo, it would be helpful to have any considerations that might appeal to the local Chinese authorities, which the Department may wish to give this office.
Sent to the Department. Repeated to Peiping and Shanghai. Shanghai please repeat to Tokyo.
- Not printed.↩