Mr. Denby to Mr. Olney.

No. 2688.]

Sir: I have the honor to acknowledge the receipt of your dispatch No. 1376, of December 19 last, wherein you set forth certain instructions relative to the promotion of American enterprises in China. In this connection I beg to refer to my dispatch No. 2671, of January 10 last, wherein I report an account of an interview with the Tsung-li Yamên. It will appear therefrom, I think, that I correctly apprehended your previous instructions.

Divers Americans have visited China with the purpose of constructing railroads, establishing banks, and developing mines. None have made any long stay, nor any persistent effort, except the American-China Development Company, which was represented by Mr. A. W. Bash. This gentleman remained here more than a year and energetically labored to secure contracts for building railroads, and he was rendered all possible assistance by this legation. Recently his attention was more particularly directed to securing the contract to construct the line from Hankow to Pekin. On the 1st of November last he made a preliminary contract with Sheng Taotai, who is director-general of railroads. Mr. Bash was not authorized by his company to conclude a contract, so the final making thereof was laid over until the arrival at Shanghai of a committee of the American-China Development Company. Messrs. W. D. Washburn, Clarence Cary, and others constituted such committee. They arrived at Shanghai on December 28 last, and proceeded to negotiate with Sheng Taotai.

At the time I wrote the dispatch No. 2632, of November 5, to which your dispatch No. 1376 is an answer, I had strong grounds to hope—having seen the preliminary contract—that the American syndicate would succeed in making a contract with Sheng which would give complete control over national progress in China. The latest advices that I have received leave the question of securing a contract to build the Pekin-Hankow line in doubt, but it appears that several American engineers have been employed, and there is no doubt that considerable material will be furnished by American manufacturers.

I have, etc.,

Charles Denby.