893.5151/7–1845: Telegram
The Ambassodar in China (Hurley) to the Secretary of State
[Received July 18—1:25 p.m.]
1179. American firms remitting to branches in China are granted rate of 40 to 1. With open market exchange rate at approximately [Page 1114] 3,000 to 1 and prices at present level this makes an impossible situation for local branches of American firms.
According to our information, only business remittances from the United States in practice are now so penalized. Overseas Chinese can now remit at 500 to 1. Dollar funds from United China relief and other philanthropic and educational bodies are sold through the United Clearing Board at C rate adjusted from time to time by the board’s directors, the present being 1650 yuan per dollar. Chinese Government agencies such as the Szechwan and Yunnan Provincial Governments, as well as ministers of the National Government, are among the purchasers of U. S. dollars through the United Hearing Board, and at its established rates. Personnel of United States civilian and military agencies are paid in United States currency which now has open market value of approximately 3,000 to 1.
British firms, now active in trade promotion, can remit through the “exchange channel” operated by the British Embassy. Sterling deposits in London are sold through the British Embassy and Consulates, principally at Kunming, at rates usually approximating United Clearing Board rates, British firms use this channel on exactly the same basis as does the British Government for its local expenses. The British system operates with the knowledge but not the official approval of the Chinese Ministry of Finance, as does the United Clearing Board and the United States Embassy in paying salaries in U. S. currency to be converted at open market prices.
Please advise Commerce and confirm with Treasury local information that licenses can be granted for deposits in New York against which local branches can sell at privately arranged rates. If such is case, please advise International General Electric Company, with whom Robertson97 discussed remittance problem before his departure, and other companies concerned.
- Walter S. Robertson, Minister-Counselor for Economic Affairs.↩