Meanwhile. un the economic front, government officials indicated that ernment departments that the Ad= istration was. prepare id to the Japanese war machine by withholding vita) war materials From dalat Congress yesterday yavs a virtual ket endorsement to the Admintstration's strong Far Eastern policy and at the same time opened the way for the stabilization" of the currency of other nations technically The Secretary of Tre: Henry Morgenthau, who te fore the joint Congressional com-1e2 yesterday, later told the press "this is the beginning of a new policy in the administration of the Aterican stabilization fund."
China "at Peace"
He revealed that the major ques: tion considered at the joint committee meeting yesterday was whether China was at war or peace. He said it was ily decided that since the United States had not invoked the Neutrality Act in the Sino-Japanese war, China technically was at peace, "This is part and parcel of the whole Chiness picture," he "aid, ministration that qhe Mr. Morgenthatt said the Govern= ment had not yet worked out all the Cetails for stabilizing Ching's, our but he said the-plan undoubt-involve buying the Chi ata rate to be fixed in with the form: read of the Bank of China, Mr.
Soong, who is now in Washington, Mr. Morgenthau disclosed that thus far China had repaid the United States U.S$81,500000 out of $99,000,- (000 borrowed from America since 1931, Morgenthau, said he testified before the joint Congressional com= yesterday because he felt some Congressmen earlier inthe year had feared that the American currency. stabilization fund might be used to support the French frane and thereby aid France at_way 'Ins, Morgenthau said that he then had no Intention of adopting such a policy, However, he said, t0 reas: sure Congress, he promised that if ever a case' arose which seemed doubtful, he would consult Congress.
As a courtesy to Mr. Soong and the Chinese Government, Mr. Morgen-thaw said, no announcement regarding current negotiations would be made until the Sino-American talks in Washington have been concluded, rees 10 some 'Mr, Morgenthau emphasized, however, that the stabilization' fund would merely engage in a "stabiliza~ Vion operation" which would amount to neither a loan nor credit to China.
Text read from the printed page and cleaned; old type leaves the occasional error.