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503 @29298 PREPARING OFFICE 5-4 TO BE TRANSMITTED will INDICATE WHETHER SECRET Collect TELEGRAM SENT CONFIDENTIAL RESTRICTED CLEAR Charge Department Bepartment of State Charge to Washington, -2m of the monthly total placed in the yuan account by the Government of the Republic of China shall be recorded as a part of China's contribution to the common war effort UNQUOTE of the two governments/; that the yuan account establi shed in Chungking will be used to meet the requirements of the U.S. military forces oprating in China but that the United States Government reserves the right to determine for what purposes expenditures from this account will be made; that QUOTE /when in the opinion of the United States Government the operations of any other United States egency in China are connected with the war effort, expenses of such agencies UNQUOTE may be paid from the yuan account referred to herein/; and that the provisions of this agreement are not in lieu of but in addition to any other aid which may be mutually agreed upon as a contribution to the common war effort. 3. If Treasury is unable to reach satisfactory agree- ment with Kung, War Department tentatively proposes, after further consultation with interested departments here, to see if this agreement which is primarily intended to meet financial requirements of our armed forces but which would also include financial needs of other U.S. agencies in It is possible the China can be negotiated with the Chinese. AND RECORDS : SERVICEN

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