893.51 Contractual Obligations/34: Telegram
The Acting Secretary of State to the Minister in China (Johnson)
226. Your 369, July 19, 3 p.m., and previous in regard to proposed Sino-American claims commission. In view of the existence during the past year of an unusually disturbed and complicated financial situation in China and of the widespread expression of opinion in China that among the factors contributing to the situation under reference should be included the silver policy of the United States, the Department has refrained from suggesting that the Legation press strongly for the prompt creation of a Sino-American claims commission. However, as the Department has in no way modified its views in regard to the desirability of following the procedure suggested, or one similar thereto, and as the near future would seem to hold forth little hope of a more auspicious period within which to revive the subject, the Department, having noted with approval the Legation’s action as reported in its despatch of May 24,36 from Nanking, desires that the Legation continue to urge strongly the creation of a joint claims commission. The Department suggests that in approaching the Chinese Government the Legation refer to the situation outlined in its telegram No. 192 of April 24, 1934, 3 p.m.,37 and to the opinion of the Department that the Chinese Government has now had ample time to acquaint itself with the nature of the American claims under consideration.
In addition to the foregoing, the Legation should, as previously requested, endeavor to effect settlement of individual American claims. Decision with regard to possible reductions in the amount of such claims rests of course with the concerned claimants. The Legation, however, might, when appropriate opportunity offers, point out to American claimants that in certain instances unpaid accounts of long standing against the Chinese Government have been settled on a mutually satisfactory basis due to voluntary agreement on the part of [Page 763] the claimant to substitute for compound interest at high rates simple interest at normal rates, the principal remaining unaltered. The Legation might also point out its complete willingness to continue its endeavors to cause the Chinese Government to pay American claims in full but that the apparent preparedness of numerous creditors, particularly of other nationalities, to compromise with the Chinese Government naturally complicates the situation and that American claimants may therefore wish to reconsider their position from a practical as well as a legalistic point of view. Irrespective of the decision reached by American claimants it is suggested that by the use of all appropriate and practicable means, the Legation make special effort to cause the Chinese Government to liquidate its outstanding accounts with American citizens.
- Not printed, but see memorandum by the Minister in China, p. 755.↩
- Foreign Relations, 1934, vol. iii, p. 553.↩