893.51/2–2546: Telegram
The Secretary of State to the Embassy in China
Washington, March 2,
1946—1 p.m.
389. For General Marshall.
- 1.
- Eximbank credit for war-built N–3 ships on terms stipulated Ship Sales Bill which now awaits President’s signature:86 25% cash, balance not more than 20 annual installments 3½% interest unpaid balance (Urtel 360 Feb 25, Deptel 296, Feb 15).
- 2.
- Ship Bill not applicable to older ships but its passage makes desirable application [of] similar terms to credit for older ships. However, credit term 15 years consistent with expected life, amortization deferred 5 years. Moreover credit covers full purchase price.
- 3.
- Terms offered on railway and power plant equipment are 3% 30 years amortization after 5 years as authorized [by] National Advisory Council resolution “The Eximbank’s general rate of interest on 20 to 30 year loans to foreign govts for reconstruction and development should be 3%”.
- 4.
- 3 (c) terms granted only for goods requisitioned under Lend-Lease and requisitions accepted here but not contracted for prior to V–J Day. Terms of Eximbank French credit applied only to such goods and are in accord with NAC resolution Sept 27, 1945 as follows “In financing the export of goods for which requisitions had been filed by foreign govts under Lend-Lease and accepted by this govt prior to V–J Day, the Bank’s interest rate should be 2⅜% for 30 year loans, i. e. the same as in Lend-Lease 3 (c) agreements.” China’s requisitions, approved (that is, accepted here) but not contracted for by US, only about $10 million (Deptel 327, Feb 20 estimated $50 [Page 955] million). Only railway or power plant equipment included in this sum were smaller power plant equipment aggregating $1,397,000 suitable air transport. Since China did not request Eximbank credit 3 (c) terms for any of this $10 million until 11 Feb (Deptel 327) Dept and Eximbank are reluctant to recognize responsibility at this date to adjust terms to those earlier given other countries, unless you feel Chinese situation requires otherwise. In any case application French terms would have saved China only difference between 3% and 2⅜% on $10 million. Your further comments are requested.
Byrnes
- Approved March 8, 1946; 60 Stat. 41.↩