893.5151/458: Telegram

The Ambassador in China (Johnson) to the Secretary of State

247. Tientsin’s May 13, 9 a.m. It is understood that National Government has imposed restrictions on export trade at Hankow and Canton for the purpose of controlling exchange in favor of the National Government. I have discussed matter on several occasions with local manager of the National City Bank who is discontented because regulations of Government have resulted in clients negotiating direct through Government banks for exchange rather than through him. It is possible for merchants to apply for exchange through foreign banks, but foreign banks are required to resell such exchange to the Bank of China or to the Bank of Communications. Merchants have endeavored to cooperate with Government and are generally contented with present arrangement which is perhaps best they can obtain under present conditions. Under the circumstances I have not felt that it would serve any useful purpose for me to protest to the National Government, particularly on the grounds mentioned by the Bank at Tientsin.

Repeated to Tientsin and Peiping.