Memorandum to James S. Lanigan from Elting Arnold

SEP 2 1951 James S. Lanigan Elting Arnold (Initialed) E.A. Reference is made to the list headed "Summary of Information on China Lobby" which you circulated at the last meeting of the Committee. Your attention is directed to the following sentences in item No. 4 of the list under reference: "He are further advised that Treasury Department kept a list of intercepts from the Chinese during the war and maintains a punch card file on these intercepts which must be available. In this card file we are advised is informa- tion on large purchases of jewelry by Madan Chiang Kai-shek during the war." During World War II the Treasury Department received and maintained a file of censorship intercepts relating to financial transactions. These censorship intercepts were transferred to the Department of Justice with the other Foreign Funds Control records and files pursuant to Executive Order No. 9989 of August 20, 1948. An IBM punch card file relating to the intercepts was also maintained in the Treasury Department. This file was not transferred to the Department of Justice at the time of transfer of the other Foreign Funds files since the Department of Justice believed that it would be of no utility to that Department. In this connection it should be noted that the blocking in this country of Chinese assets under World War II controls had already been terminated. Subsequently, since the National Archives had in its possession under presidential seal the original copies of the intercepts, the Department of Justice sought per- mission to destroy the duplicates in its files. Authority for their destruction was obtained from Congress under Archives No. 349-202 dated August 1, 1949 and the Department of Justice file of intercepts was destroyed. The IDM card file maintained in Treasury was, thereafter, destroyed pursuant to the same authority. We have reviewed the Foreign Funds Control files presently maintained in the Department of Justice relating to Madam Chiang Kai-shek. These files reveal no information on jewelry purchases but contain the following digested information: From March 1, 1943 to June 1, 1943 payments from the accounts of the Bank of China, New York Agency, to Mudam Chiang Kai-shek in the amount of $370,000 were made; in addition to these another payment of $100,000 to Vadam Chiang appears. The checks in question were endorsed over to Lin Kai Kung (also referred to as Ling Kai Kung) and his secretary, P. 0. Woo And ARCHIVED NATIONAL AND RECORD# U.S. SERVICE ROVERNMENT