Evening star., 1951-06-08

JOTe Tue JOLHL DGHuLe COULULttCGe
Investigating Far Eastern policy:
Senator Mcmahon Continuing,
-. Now, Mr.. Secretary, wish
you would turn your attention tt
an entirely different matter. d.
your remember when it was thai
in the early 1940's-a credit wa:
granted to the Chinese Nationalist
government?
Secretary Acheson-Yes sir,
think that was in a public aci
passed In 1942. AS I recall it
lit was a $500 million credit.
| Senator McMahon-.. = Do yor
know how much of it was drawr
lin gold?
| Secretary Acheson-My recol.
lection is that it was about $20C
million, somewhere in that neigh.
Iborhood.
Senator McMahon-Do yor
know, Mr.. Secretary, whether this
was simply earmarked here
or was it physically transferred
to China? :.
Secretary Acheson-I think il
was earmarked, and I think &
great deal of it was transferred
physically to China, and sole
there.
Senator Mcmahon. Now. Mr.
Secretary. I have been informed
that the Chinese Nationalist Gov.
ernment issued. against this gold
bank notes payable in two or three
years, in small denominat tions o1
ten. twenty and fifty dollars.
I have also been informed thai
these notes were sold to the in.
side clique around Chang; thai
they were sold. for Chinese dollars
at the official rate which was, al
various times. twenty-to-one, anc
i believe 1t got up as high as q
thouSand-to-one.
I am informed that at tha
time the black market rate or
Chinese dollars, to the American
dollar, was as much as 100000
Iand-yes-a million-to-one
Mcmahon Charges Crookedness.
In other words, that this clique
took Chinese dollars which the,
had gotten together. at the rat,
OF a million Chinese dollars fol
one American dollar, and pro.
lceeded to buy notes of the Chimes,
Nationalist Bank, which wert
backed up by the 5000 million gole
credit, at the rate of 20 Chinest
dollars to one, and that when thu
notes came due. this bunch o.
crooks cashed in the Chimes,
bonds. took dollars in and gold
and proceeded to invest it in tn,
United States of America, fol
their own private profit.
| What can you tell us about tha
transaction?
Secretary Acheson-. :. This /.
a memorandum to Presiden
Roosevelt, from the Secretary O.
the Treasury, Mr.. Morganthau, O.
December Is, 1943, which is ref.
erence-he says:
"You have spoken of a reques
of Generalissimo Chang Kai-shel
for an additional 81 billion o.
financial aid to China to be uses
to help control imitation and fol
postwar econstruction."
Then he gives the facts regard.
ing imitation in China, and say.
the possibilities of it's control ar,
as follows, and then he talks abou
that, and then he has some para,
graphs which bear on the mattel
that you have been discussing
He says:
China has tried two simila,
monetary remedies for alleviatin,
imitation without marked sue
cess"
! Senator Mcmahon. So, Mr.. Sec
retary, we sent 5000 million owe
there in gold. out of the Treasur
OF the United States, in order t
save their currency, and 1t re
suited in no significant contrihll
ton to the control of imitation?
Secretary Acheson. That is wha
the Secretary of the Treasur
states here: and, he goes on
say:
Under the circumstances, +,
loan to China for these purpose
could not be justified by the re
suits that have been obtained.
is my opinion that loan is un
necessary at this time and woul
be undesirable from the point G
view of China and the Unite
States. Large expenditures en- in
effective measures for controllin
imitation in China would be an un
wise use of her borrowing capacit
which should be reserved for pro
ductive uses in other ways. O
reconstruction, it is too soon for L
to know the best form Of aid W
might give to China"
Responsibility Denied.
Senator Mcmahon. Yo
would not consider it a part G
your responsibility, the responsi
bility of your Department. becaus
you have to deal with this Gov
ernment, to find out what becam
Iof that 5000 million in gold, an
how much of it lined the privat
pockets of the spectators, graft
Iers and corruptionists?
Secretary Acheson - No, sil
We have no authority, no fund.-
and no means of conducting sue
an investigation.
Senator Mcmahon - Well, d
you know of any such investiga
tion that has been conducted b
this Government into this trans
acation?
Secretary Acheson - No.
would not be in my Department
iii it had been conducted.
Senator McMahon-Let me ss
for the. record, Mr.. Secretary, tn,
p
y