893.811/328: Telegram

The Acting Secretary of State to the Minister in China ( Reinsch )

At request of American International Corporation ask Gatrell50 inform you fully regarding second canal advance and represent orally and informally to Director General Grand Canal Improvement Board, for Chinese Government, first, that Corporation speaking for the company is glad he agrees to inclusion expenses preliminary survey within amount upon which 10 per centum commission shall be paid, second, but that unless he concedes that work of contractors began with beginning of survey August 1, 1918, when survey engineers started for China, third, that lump sum of 1,000 Peiyang per month shall be paid as from August 1, 1918, fourth, and that said sum may by mutual agreement be increased when work and expense of head office make more adequate remuneration necessary, the Corporation must consider whether it should not in the best interest of China, withdraw engineers, secure payment of expenses incurred and repayment of $250,000.00 already advanced.

Corporation which is ready to make second advance available immediately upon signing of agreement by Chinese Charge at Washington, is convinced review of matter by Director General will cause him to abandon position taken in his letter of April 19th51 and to authorize signing without reservation, especially when he realizes that Corporation offered to make survey at its own expense but that China preferred herself to make it, that Corporation continued its work in China during the adverse times of the war, that Corporation can employ its money, time and skill far more profitably elsewhere, especially at this juncture, that Corporation cannot justify continuance of work if contention and obstruction continue, nor justify its course to its stockholders if the small prospect of returns is further diminished and that it sincerely desires to assist China if China will so permit.

Telegraph reply.

Phillips
  1. Representative of the Siems-Carey Railway & Canal Co., in Peking.
  2. Not printed.