893.51/4401: Telegram

The Minister in China (Schurman) to the Secretary of State

316. Following is identic telegram addressed by British, French and Japanese Ministers to their respective Governments:

“Referring to the groups representatives’ telegram of today’s date.64

The four Ministers decided that the proposals submitted to the four salt banks for monthly advances to certain public bodies for the payment of the police gendarmerie and certain educational establishments in Peking was a disguised annuity by the Chinese Government for a loan for administrative purposes and as such should be regarded as consortium business. The grant of such advances, however, would appear to be in conflict with the policy of the four Governments as explained to the groups in beginning. The examination of China’s debt position by the four group representatives in consultation with the Ministers has now reached a stage that further progress cannot be made towards the elaboration of a definite consolidation scheme or the investigation of China’s unpledged assets with a view to finding fresh security for a consolidation loan without the cooperation of the Chinese Government. Experience has shown that such cooperation will not be forthcoming except on the condition of the making of monthly advances for administrative expenses.

The question arises whether it is desirable to make such advances to the present Government which no longer rests on any legal basis and cannot be said at present to offer the necessary guarantees for the negotiation of such an important matter as the consolidation of China’s debts.

While the political conditions are worse than they have been, it is nevertheless possible that there may result from the Presidential crisis which began on June 13th an improvement in the Peking Government with such a reasonable degree of stability and efficiency as would warrant the consortium in taking up with it the consolidation of the loans and in that event the four Ministers would recommend that advances be made for moderate administrative expenses.

Subject to these observations, the four Ministers concur in the telegram received the four groups.”

Schurman
  1. Not printed.