File No. 5315/258–259.
The Secretary of State to Chargé Fletcher.
Washington, June 16, 1909.
Mr. Knox acknowledges legation’s telegram of the 15th, and informs Mr. Fletcher that the American group is willing to participate in this loan on the French basis—that is 25 percent of the total loan on terms identical with those of the French, having equal preference with French, British, and Germans in regard to all financial relations as well as to materials; says that, owing to the fact that the British, French, and German groups have so nearly reached the conclusion of their negotiations prior to the formation of the American syndicate, the American group will not insist upon rights in regard to chief engineers and auditors informs him that in signifying its readiness to participate in this loan as above on the general outline which Mr. Fletcher already has telegraphed, the American group does not wish to consider itself bound by any provisions of the agreement not known to it and which may impose obligations upon it of which it knows nothing; adds that the American group expects, moreover, in addition to participation on the basis named, equal rights to appoint its own representative to act with the banking representatives of the other groups as provided in article 7 of the Tientsin-Pukou agreement, a copy of which agreement has been submitted to the members of the groups; but it does not feel competent to approve the terms of this agreement in entirety, owing to lack of knowledge as to what portion thereof governs present contract. Mr. Knox says it is assumed that in adapting the terms of the Tientsin-Pukou agreement to meet the conditions created by the introduction [Page 163] of American and French in addition to British and German interests in the recent agreement, consideration will be shown to the special requirement of the American market covering engraved bond, etc., etc.
Mr. Fletcher is directed, when informing his inquirer concerning this attitude of the American syndicate, to point out that in taking this position the American group is influenced by its desire to establish harmonious relations with the British, French, and German interests in order to secure cordial cooperation in future enterprise, and that its action in waiving what might be claimed to be its just right may not be regarded as creating a precedent as to the basis for future participation) in foreign financial operations in the Chinese Empire.
Refers to legation’s telegram of the 16th, and says in case the British, French, and German groups are ready to accept American participation on the basis above stated he is authorized to sign this agreement on behalf of American syndicate.