893.00/4374: Telegram
The Secretary of State to the Minister in China (Schurman)
150. Our no. 130 of May 25, 4 p.m.52 The Department brought your no. 231 of May 24, 1 p.m.,53 and no. 239 of May 31, 4 p.m.,52 to the attention of the American group. They have replied that although they desire to assist China it does not appear that in the near future it would be possible to negotiate a loan based on any security at present available. The allusion made at the meeting of the council held in London regarding the possibility of making loans for administrative purposes looked ahead to the establishment of stability to a degree that would not only give confidence to investors but also enable the Chinese Government to remedy the defaults existing on American issues before seeking in this market for any new money, the remedy of such defaults being an absolute prior requirement to floating any new loan in the United States.
[Page 720]The American group states that it is of the opinion that the establishment of an orderly government to which loans for proper purposes may be made in due course will be hastened by the union of the North and South. It is not, however, the opinion of the American group that such loans may be floated in anticipation of the setting up of an orderly central government having revenues under its adequate control upon which a loan operation could be based.