893.74/200: Telegram
The Minister in China (Schurman) to the Secretary of State
[Received December 5—4:45 p.m.]
432. With reference to the Department’s telegram 307, of November 29, I feel a great disinclination to intimate the views of the Federal Telegraph Company to the Chinese Government. The Legation’s correspondence transmitted to the Department shows the support which both the Department and the Legation have given to the Company. The Chinese Government has been assured that the scheme would be a complete financial success and that it, furthermore, represents very important American national interests to assure free communications between China and the United States. The need of public issue was never mentioned to the Chinese Government and Federal Telegraph Company’s representative, Moss, at Peking, repeatedly assured this Legation that no public issue would be necessary. [Page 456] Under the circumstances the Chinese Government would fail to accept the Federal Telegraph Company’s excuses or to understand them and they would claim that there exists no connection between the execution of the contract and the Chinese loan default. It would be regarded by the Chinese Government as another American failure in this country, and as conclusive proof that America does a great deal of talking and accomplishes very little in China. The Legation’s position would be seriously injured. Might it not be possible for the Federal Telegraph Company to procure aid from the War Finance Corporation as the Federal Telegraph Company’s representative stated would be assured if requisite? This matter vitally important to American prestige in China in my opinion.