Mr. Sherman to Mr. Denby.

No. 1404.]

Sir: I have to acknowledge the receipt of your 2671, of January 10 last, reporting an interview had by you with the Yamên on the subject of railroads in China, whereat you urged upon them the making of contracts with Americans to build the Hankow-Pekin line of road.

The Department commends the interest you take in the advancement of American enterprises in China and the efforts made by you in their behalf with the Chinese foreign office, but you should be cautious in giving what might be understood as this Government’s indorsement of the financial standing of the persons seeking contracts with that of China. In the present case it appears from your dispatch that you [Page 60] told the Tsung-li Yamên that the American-China Development Company “was composed of men who were worth several hundred millions of taels.” The Department understands that the said company is a limited liability company, with a very small capital. The individual financial standing of the various persons composing the company has, consequently, little to do with the matter.

I am, etc.,

John Sherman.