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AIDS-M^MOIRK
His Majesty's Government in the United
Kingdom are most grateful to the United States
Government for the helpful attitude which they
hare adopted with regard to His Majesty's
Government's proposal for assisting China by means
of a currency loan.   In the light of the President's
views, which the Under Secretary: of state was so
good as to convey to Mr. Mallet on the 11th January,
His Majesty's Government now Intend to proceed with
an examination of details of their project for
assisting the Chinese currency*   They will of course
keep the United States Government informed of the
progress they make.
Meanwhile they will he grateful if they
may he furnished when this becomes possible with
further information. In a form as detailed as the
United States Government may feel able to give, as
to the nature of the parallel action which the
United States Government hope to take.   This would be
helpful to His Majesty's Government in the event of
their deciding to proceed, as they would have to
Introduce legislation and may therefore be in a
position where they would wish to state what is (U*
parallel and simultaneous action which United States
are prepared to take.
An unexpected complicating faotor has
however been introduced by the recent decision of
the Chinese Government to suspend the service of
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foreign loans secured on the Cub tone,   in the view
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of His Majesty's Government this step is hound to
prejudice efforts to maintain the credit of China
and before they undertake to contribute to any
stabilization fund it will be necessary to secure
that all possible measures are taken to restore
security for their loans.   For this purpose the
first essential is to persuade the Chinese Government
for their part to permit the implementation of the
arrangement relating to the China Customs negotiated
by His Majesty*s Ambassador at Tokyo with the
Japanese Government on 2nd May last*   His Majesty's
Government are convinced that this arrangement is
in best interests of China and affords the only
basis for attempts to maintain the integrity of the
China Customs.
BRITISH EMBASSY,
WASHINGTON, Hm C.,
January 24th» 1939