File No. 1571/28.
Chargé Fletcher to the Secretary of State.
Peking, January 3, 1910.
Sir: Replying to the department’s instructions No. 658, of November 2 last, (file No. 1571/22–23) and supplementing my No. 1301, of November 23, on the subject of the Whangpoo conservancy, I have the honor to report that I took occasion to say to Mr. Liang Tun-yen, the president of the foreign office, on the 31st ultimo, that rumors had reached the department to the effect that China contemplated a foreign loan to cover the additional funds necessary for carrying this important work to completion, and that certain British capitalists contemplated making such a loan to China.
In reply he informed me that the report was untrue; that China did not feel obliged to expend the money which seemed to be called for now and held that in providing the funds called for by the agreement of 1905 she had discharged her full duty and responsibility under her engagement to the powers, but that, nevertheless, China, of her own free will and accord, would carry on the work. I told him that that was a matter of interpretation of the protocol of 1901 and of the agreement of 1905, which would be settled in due course; that present inquiry had reference merely to a reported loan. He again stated that China did not at present contemplate a foreign loan for this purpose, and if one became necessary in the future no one nation would be favored, but that China would borrow where she could get the money on the best terms.
I have, etc.,