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DECLASSIFIED E.O. 11652, Sec. 3(E) and 5(D) or (E) 53-2 439 Dept. of State letter, Aug. 10. 1972 By NL-WC NARS Date 6.26.75 SBORET figure, of certificates now offered for sale by the Chinese Government which are redeemable in the United States at a later date, or similar unethical black market operations made possible by our favorable methods of pay. Second Category. The use of the special reciprocal Lend-Lease fund will be authorised also for adjusting contracts in local currency made by you for items other than pay of personnel up to the amount of yuan made available by the Chinese under the reciprocal Lend-Lease arrangement. Personnel require- ments, however, should have first priority, where practicable. So that the Chinese may receive some United States credit or currency, you will purchase rfficient yuan at the official rate to pay on contractual obligations such pro- portionate share of the total cost as the official rate bears to the adjusted figure decided upon by the representative of theTreasury Department. This widl not preclude the Chinese from financing under reciprocal Lend-Lease any special project if they care to do so. The Chinese in filling requisitions for the reciprocal Lend-Lease fund, under either category of the proposed plan, will not be credited as con- tributing any yuan for specific purposes unless especially agreed upon between the interested parties. This is desirable so that no clain may be made by them that they have paid any specific part of the pay of our personnel or other United States' expenditures except as agreed. You are free to discuss this plan with the representatives United States Treasury Department, United States Lend-Lease Administration or United States Embassy, but it should not be dis- cuased with the Chinese representatives there as all negotiations with them are being handLed here in Washington. Your radio 635, July 9, noted. The United States representative on the Stabilization Board, Chungking - Mr. Sol Adler - should be able to advise you on the import of Japanese action or on similar matters involving Chinese currency. While the plan contemplates payment of your personnel in local cur- rency as far as practicable all funds which they elect to receive in area and requires you to take certain restrictive action regarding the fiscal affairs of your personnel, you will not be held to any provision of the plan if your military needs dictate otherwise in your opinion. You have liberty of action. Your radio comment on the plan is desired before further discussion with the Chinese representatives here. Please expedite. No Sig. (This document contains information affecting the national defense of the United States within the meaning of the Espionage Act, 50 U.S.C., 31 and 32, as amended. Its transmission or the revelation of its contents in any manner to an unauthor- ized person is prbhibited by law.) GEORET 8. PORATIONAL AND a us en SERVIC RECONE

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    "ocrText": "DECLASSIFIED\nE.O. 11652, Sec. 3(E) and 5(D) or (E)\n53-2\n439\nDept. of State letter, Aug. 10. 1972\nBy NL-WC NARS Date 6.26.75\nSBORET\nfigure, of certificates now offered for sale by the Chinese Government which\nare redeemable in the United States at a later date, or similar unethical\nblack market operations made possible by our favorable methods of pay.\nSecond Category. The use of the special reciprocal Lend-Lease fund\nwill be authorised also for adjusting contracts in local currency made by you\nfor items other than pay of personnel up to the amount of yuan made available\nby the Chinese under the reciprocal Lend-Lease arrangement. Personnel require-\nments, however, should have first priority, where practicable. So that the\nChinese may receive some United States credit or currency, you will purchase\nrfficient yuan at the official rate to pay on contractual obligations such pro-\nportionate share of the total cost as the official rate bears to the adjusted\nfigure decided upon by the representative of theTreasury Department. This widl\nnot preclude the Chinese from financing under reciprocal Lend-Lease any special\nproject if they care to do so.\nThe Chinese in filling requisitions for the reciprocal Lend-Lease\nfund, under either category of the proposed plan, will not be credited as con-\ntributing any yuan for specific purposes unless especially agreed upon between\nthe interested parties. This is desirable so that no clain may be made by\nthem that they have paid any specific part of the pay of our personnel or other\nUnited States' expenditures except as agreed. You are free to discuss this\nplan with the representatives United States Treasury Department, United States\nLend-Lease Administration or United States Embassy, but it should not be dis-\ncuased with the Chinese representatives there as all negotiations with them\nare being handLed here in Washington.\nYour radio 635, July 9, noted. The United States representative on\nthe Stabilization Board, Chungking - Mr. Sol Adler - should be able to advise\nyou on the import of Japanese action or on similar matters involving Chinese\ncurrency. While the plan contemplates payment of your personnel in local cur-\nrency as far as practicable all funds which they elect to receive in area and\nrequires you to take certain restrictive action regarding the fiscal affairs of\nyour personnel, you will not be held to any provision of the plan if your\nmilitary needs dictate otherwise in your opinion. You have liberty of action.\nYour radio comment on the plan is desired before further discussion with the\nChinese representatives here. Please expedite.\nNo Sig.\n(This document contains information affecting the national defense of the United\nStates within the meaning of the Espionage Act, 50 U.S.C., 31 and 32, as amended.\nIts transmission or the revelation of its contents in any manner to an unauthor-\nized person is prbhibited by law.)\nGEORET\n8.\nPORATIONAL\nAND\na\nus en SERVIC RECONE"
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