File No. 1571/22–23.
The Secretary of State to Chargé Fletcher.
Washington, November 2, 1909.
Sir: The department acknowledges the receipt of your unnumbered dispatch of the 16th ultimo [Sept. 16], in which you report that a meeting of the diplomatic corps was held on the 15th ultimo [Sept. 15] to consider the steps that should be taken to procure the necessary funds for completing the conservancy of the Whangpoo River.
The department notes with interest your statement that China now faces the dilemma of returning to the original scheme as contained in the provisions of the protocol of 1901, and of Annex XVII thereto, which called for a joint Chinese and foreign undertaking, or else of continuing the work at an increased outlay of almost Mexican $10,000,000 in the next five years.
Your suggestion that the additional expense might be provided for in connection with the increase in import duties desired by China does not appear to the department at present entirely practicable, owing to the manifest lack of sympathy with which this proposal of the Chinese Government is viewed by several of the treaty powers, and the lapse of time that would necessarily have to occur in any case before an increase could be agreed upon and made effective. The imposition of a surtax upon riparian property and upon trade and navigation, as suggested by you, would probably not be objected to by this Government.
The department learns, however, that a persistent rumor obtains in Shanghai that the Chinese Government will probably be obliged to resort to a foreign loan to cover the additional funds necessary for carrying this important project to completion, and that certain British capitalists contemplate making the loan to China. Should the Chinese Government resort to a foreign loan for this purpose, this Government, in view of the vast commercial and other interests, actual and prospective, of the United States in the great international trade center of Shanghai, would expect that American capital would be permitted to participate therein.
You will informally convey to the foreign office the views of this Government upon this subject, and after discreetly ascertaining the decision of the Chinese Government, inform the department fully and promptly of the result of your inquiries.
I am, etc.,