File No. 5315/285–286.
Ambassador Hill to the Secretary of State.
Berlin, June 9, 1909.
Sir: I have the honor to report that, in compliance with the department’s telegraphic instruction of June 7, 1909, relating to the loan for the construction of the Hankow-Szechuen Railway, I saw in person, on the same day the instruction was received, the Imperial secretary of state for foreign affairs, Baron von Schoen, to whom I made the communications contained in the instruction, leaving with him a memorandum, of which I inclose herewith a copy.1
Baron von Schoen listened to my statements until I had finished and then said: “We have taken no part as a Government in the arrangement [Page 151] of loans in China, and up to the present have left those matters entirely to the bankers.”
The above sentence, which is cited verbatim, I have thought it desirable to report telegraphically, and have done so.
In further conversation Baron von Schoen said that his Government had so far refrained altogether from using influence to obtain loans for German banking houses, believing that the bankers understood their interests and did not require any Government action in their behalf. To this I said that if this were the universal rule, and if it were loyally observed, it might be best to leave those transactions entirely to those immediately concerned in them; but as matters now stand, since some governments use great pressure to obtain advantages for their nationals, it could not be to the others a matter of indifference if their citizens fail to receive due consideration, especially when that had been specifically promised.
When I had completed my communication and reached the point in the conversation which I have just stated, I asked Baron von Schoen if he had seen the announcement in the Paris edition of the New York Herald for June 7, 1909, reading:
The final draft of the Yangtze Railroad loan agreement was signed to-day (June 6) by the Grand Councillor Chang Chih-tung and representatives of the German, English, and French banks.
The terms * * * are for a total of five and one-half millions sterling, divided equally among the German, English, and French banks; the Germans to furnish the engineers and the materials for the Hankow-Szechuen line, and the English and French furnishing the engineers and materials for the Hupeh-Hunan of the Hankow-Canton line.
He replied that he had seen this announcement, but thought there might still be room, notwithstanding an apparent fait accompli, for negotiations of the New York group of bankers with the others.
In the course of a friendly discussion of the subject which followed after I had informed the secretary that my official business had come to an end, I stated that, in my personal opinion, my Government was, perhaps, the least aggressive of any of the great powers in demanding from the oriental countries special privileges of any kind, never having asked for anything but an open door and a fair field. On the other hand, I did not think my Government would find it possible to neglect the interests of American capital and enterprise in the East by passing over in silence the efforts of other Governments to secure special favors for their nationals to the exclusion of Americans; and I was glad to believe that the Imperial Secretary coincided with me in accepting the correctness of that position, and he was certainly able to aid in giving it support. Baron von Schoen assented to this view as being right and reasonable, and repeated the statement that Germany had up to the present pursued the policy of nonintervention in the matter of loans in China. I asked him if I might report that attitude to my Government, and he replied that he would be glad to have me do so.
I have, etc.,
- Not printed.↩