893.51/2293: Telegram
The Minister in China (Reinsch) to the Acting Secretary of State
[Received July 2, 12.05 p.m.]
My telegram June 11th, 3 pan.33 The Chinese Chargé d’Affaires has reported that the Department received demarche with the statement that nothing could be done as the new consortium had not yet been formed. This has greatly discouraged the Government here although of course no other answer could have been given. It appears to me of the greatest importance that when the Chargé d’Affaires approaches leading bankers, he should be given definite encouragement, however, conditioned on either restoration of unified Government or agreement to share proceeds with Southern provincial authorities and, particularly, acceptance of a definite disbandment policy to be begun out of the advance made. A definite promise to afford assistance immediately certain conditions are met, will restore American influence and stabilize the situation.
The influence now exercised by the Japanese is being used to turn the Government officials against the new consortium, particularly railway unification.
My telegram June 25 [26], 12 a.m. [noon,] considerations reported in paragraphs two and three are gaining in strength every day.