File No. 5315/417.
The Secretary of State to Chargé Fletcher.
Washington, August 15, 1909.
Mr. Knox authorizes Mr. Fletcher to say to the Chinese Government that this Government will consent to the arrangement as to chief engineers, as set out in article 17 of the agreement, provided the Chinese Government will assure employment of American engineers by managing director; it also being clearly understood that American materials are to have same preferences and privileges reserved to British, German, and French materials in respect to both roads and their branches, as provided in the agreement. Directs him to make it clear to Chinese Government that American rights are to be as detailed in department’s telegram of August 6, except as modified above and in these additional particulars, namely: United States agrees to the increase in loan and its allotment, as stated in articles 1 and 2, in Mr. Fletcher’s telegram of August 10, to which this is the answer, and to the provisions of article 3, which it is understood place future and supplementary loans for the two sections covered by the agreement upon the same basis as the present loan. Mr. Knox says that in agreeing to this allotment of the loan the United States does not waive equal right to materials in all lines and branches covered by the contract, and that whenever the department has the assurance of the Chinese Government and the banking groups that we have reached a common understanding upon these points, and the banking groups have arranged matters between themselves and the Chinese Government in such a way as to engraft upon the original agreement a full recognition of the American rights this Government will withdraw its objections to the original agreement.