File No. 5315/298.
The Secretary of State to the British Ambassador.
Washington, June 23, 1909.
My Dear Mr. Ambassador: I beg to acknowledge the receipt of your letter of June 14 on the subject of the Hankow-Szechuen railway loan and the participation therein of the American group.
The assurance of the British Government that nothing is or could be further from their wish than to do anything which could be prejudicial to any rights or obligations existing between the United States and China is duly noted, although I should add that, even in the absence of this specific assurance, the Government of the United States could not have entertained any doubt that such would be the attitude of the Government of His Britannic Majesty.
After citing certain details of the arrangements and negotiations which were conducted by or on behalf of the bankers themselves, your excellency, I observe, gives me to understand that your Government, with a very proper regard for the interests of the British bankers, has been not without some apprehension lest these might possibly suffer by the insistence of the Government of the United States upon its right to demand of China an equal share in the proposed loan.
I am happy in turn to assure your excellency that the Government of the United States would certainly not wish to injure by its policy the legitimate interests of the British, French, or German bankers affected. This Government does not, however, share in the apprehension which your Government at first felt, and I am happy to find myself quite persuaded that the maintenance of our rights would in no wise jeopardize the interests of the British subjects in the arrangement. I need hardly assure you that our attitude will be as considerate of these interests as our plain duty shall permit.
On Thursday the 17th, again on Friday the 18th, and again on Monday the 21st, Mr. Mitchell Innes, of your embassy, who made inquiries on your excellency’s behalf, was most fully and frankly explained the position of the United States; knowing that you had thus been informed, I had not hastened to reply to your letter now under acknowledgment, I am sure, also, that what has been communicated through Mr. Innes will have made clear to your excellency the fact that the Government of the United States finds itself entirely unable to modify the instructions to the legation at Peking or to admit that a third government, and much less that a group of foreign bankers, could expect to induce this Government to relinquish [Page 165] a right acquired for the benefit of its citizens through an official assurance from another government.
I am happy to say that our latest advices from Peking indicate that the loan agreement may soon be settled upon a basis of equal participation. Apparently it remains only for the British, French, and German bankers to come to terms with our own in a manner which this Government could accept as satisfactory. As we all know, foreign bankers in China are quite dependent upon their home governments, and it is a corollary to this fact that it would be extremely easy for the Governments concerned to put an immediate stop to the present controversy by informing their bankers that they should yield to the American group the share to which this Government holds a right over them by the pledge of China.
I am, indeed, to-day informed that the German Government has already adopted this course.
I am, etc.,