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Henry Judd

Why Roosevelt Loaned $500,000,000 to China

(February 1942)

From Labor Action, Vol. 6 No. 7, 16 February 1942, p. 2.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

As part of its announced policy to give material and financial aid to those countries fighting on the Allied side, President, Roosevelt last week granted a $500,000,000 loan to the Chinese government of Chiang Kai-shek.

Simultaneously, Great Britain announced that she was giving $200,000,000 to China as her contribution.

According to official statements, the object of these loans is to help China “in the successful prosecution of the war” by stabilizing her currency. The grand total of $700,000,000 – and there have been previous loans of around $200,000,000 before this – is supposed to strengthen China internally and make her a more powerful ally in the camp of the United Nations! War materials now being shipped to China over the Burma Road now find, according to Secretary of the Treasury Morgenthau, their “financial counterpart.”

But is this the real purpose of these enormous loans? Seven hundred million dollars is a lot of money to “stabilize the currency” of China!

First of all, we want to remind Labor Action readers that these great capitalist “democracies” of England and the United States which today seek to rush to China’s aid were not so very long ago engaged in the highly profitable business of supplying munitions to China’s deadly enemy: Japan. Everyone knows that Japan could never have continued her five years’ war against China without the aid of the United Nations.

A Suspicious Fact

This fact should be enough to make us suspicious about the motives that lie behind this new-found friendship for China.

Arthur Krock, New York Times Washington correspondent, really let the cat out of the bag when he disclosed that an American member of the Committee that negotiated the loan (which has already been approved, by Congress) had proposed that Chinese soldiers should be paid directly by the United States government! This, idea was not accepted because of the protest of the Chinese negotiators. It would have been a little TOO raw!

But this proposal reveals clearly enough the status of China in the bloc of the United Nations. “Free” China – that section of the country not occupied by the Japanese – beoomes a part of the United Nations war machine; directed by and supervised by the high command of the allies. The soldiers of China who, until yesterday were fighting for the freedom of their country against Japan, are now being used by the Allies in Burma, in Singapore and other localities for the safeguarding of the British Empire.

The $700,000,000 loan is, in reality, a huge bribe to the bankers, financiers, landlords, etc., who surround Chiang Kai-shek in Chungking and who run his government. If the scandalous racketeering and grafting that goes on over the Burma Road is kept up with respect to these loans, then we can rest assured that an all-too-large proportion of the money will find its way into the pockets of the Chinese capitalists and damn little will go toward helping the people of China.

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