Marshall Mission Files, Lot 54–D270
Memorandum by the Treasury Department Representative in China (Adler) to General Marshall
1. Dr. Soong states that Mr. Crowley after consulting his colleagues said China could expect a credit of US $560 million. As you know, Mr. Crowley was acting without authority in this matter.
2. Dr. Soong says that whereas before China had asked for $670 million she must now ask for US $1 billion. It is suggested that owing to the limitations on the funds at the Export–Import Bank’s disposal and to the demands on these funds from other sources a sum of approximately $500 million would be a more realistic target. If of course the position of the Export–Import Bank would permit a somewhat larger loan (say anything up to $750 million), so much the better.
It might be appropriate to inform the Generalissimo in your final interview that aside from Export–Import Bank financing the United States contemplates canalizing a large part of its foreign long-term lending through the International Bank for Reconstruction and Development (set up by the Bretton Woods Agreement), to the funds of which China would of course have access.
It is suggested that Dr. Soong’s table96 on China’s capacity to pay be turned over to State and Treasury Department financial experts for critical analysis. Its inadequacies are apparent even at first glance. For instance, in section “II. Sources of foreign exchange” no figure is given against item “15. Official holdings of foreign exchange and gold”, while in fact we know that these holdings total between $800 and $900 million.
It is suggested that the folder on “Initial Reconstruction Program for China—First Year Expenditure” be turned over to the Export–Import Bank and to the National Advisory Council for expert evaluation.
3. Dr. Soong’s request for a separate loan of $500 million to facilitate the demobilization of the Chinese Army is unrealistic. The economic problems arising from demobilization have to be solved by internal measures with which an addition of $500 million to China’s foreign exchange resources have very little immediate connection. One does not demobilize soldiers with foreign exchange.
- Copy not found attached to memorandum of March 10, supra.↩