893.51/6–1446: Telegram
The Counselor of Embassy in China (Smyth) to the Secretary of State
[Received June 14—1:05 p.m.]
981. From Adler to Secretary of Treasury. In conversation with Dr. Soong on June 13 he emphasized gravity of the cotton situation, indicating that excessive imports of cotton were taxing port and storage facilities, were encouraging speculation, and providing convenient channel for flight capital. Accordingly he asked me to transmit to you a request from him that the granting of specific licenses releasing Chinese blocked assets for purchase of cotton be discontinued for time being. (This step would of course apply to purchase of cotton only and not to use of blocked funds for purchase of other commodities).
2. I understand that Chinese Government is contemplating taking further measures tightening up exchange control with respect to cottons. [Adler.]