File No 893.00/672.

The American Minister to the Secretary of State.


The immediate question confronting Yuan Shih Kai is money for current expenses. Brigandage is increasing throughout the country and business is suspended; the approach of winter increases the gravity of the situation. Local banking representatives of the four groups seem willing to make a loan if actively supported by their Governments. A further question arises as to whether the loan if made should include only the four groups or all foreign interests. And the delicate international question also enters as to who shall take the initiative. Please instruct.