File No. 893.00/759.
The American Minister to the Secretary of State.
Peking, December 11, 1911.
I appreciate the desirability of neutrality, but neutrality cannot continue long if a settlement is not made in the near future. If a [Page 105] loan is made to Yuan the effect on the rebels might endanger foreigners in their territory, but the safety of foreigners cannot be assured long anyhow as the country is rapidly drifting into anarchy. If peace is not soon negotiated, the rebel soldiers will break up into bands of brigands and foreigners can then scarcely hope to escape attack. The only recognized government is in the single control of Yuan; he is apparently growing constantly stronger, but he is out of money and his Government may collapse at any moment. To secure money from private sources is impossible. This continued neutrality means to wait until conditions after Yuan’s collapse have become so bad that armed intervention shall have become necessary; this in its turn might involve serious international complications and the peace of the world.
The proposed loan to Yuan is to be used, not for active military operations, but for preserving the status quo during peace negotiations, under foreign supervision if required. If the loan is broadly international it may induce the rebels to submit to reasonable terms. I therefore adhere to my recommendation of December 6, 1911, with the following qualifications: America should not take the initiative; this should be taken by England, who has the largest interests here and whose relations with the interested powers justify her leadership. The British Minister, who at first directed his nationals to resume loan negotiations, has since seemed to vacillate and I am uncertain as to his policy. The German and the Belgian Ministers and French Chargé d’Affaires have advised their Governments that support of Yuan is necessary, but if England will not act the proposition must be abandoned.