File No. 893.51/919.
The American Minister to the Secretary of State .
Peking , May 7, 1912 .
Sir: I have the honor to report details as to the pending loan negotiations.
The breaking off of negotiations between the bankers and Tang Shao-yi, caused by the Belgian loan contract, occurred on March 15. The latter thereupon left Peking for Nanking. He did not return to Peking until on or about April 19. Immediately on his return he addressed a note to Sir John Jordan, the British minister, asking for an interview with him and with the French, German, and American ministers. This request was granted and an interview was had at the British legation on the afternoon of April 23.
At this meeting Tang attempted to explain his side of the controversy between the bankers and himself. He finally asked what he could do to clear up the situation so as to permit the renewal of negotiations. Both the French and British ministers told him they each had specific instructions not to permit further negotiations unless the Chinese would undertake to cancel the Belgian contract, because it was in violation of or inconsistent with the contract of March 9; when that was done they would instruct their bankers to resume negotiations. The meeting ended without any definite statement as to what Mr. Tang would do.
[Page 127]Late on the evening of the 27th an identic communication1 was received by each of the four ministers, which conformed in its terms to the suggestions of the ministers.
On the 29th of April the four ministers agreed to accept it as sufficient and to notify the bankers to resume negotiations.
On April 30 the bankers met with Tang and the latter then stated that the requirements of the Government were much more than first specified. He would now require something like 35,000,000 taels, to be paid over in varying weekly installments for the succeeding five weeks, with 2,000,000 taels for famine relief, and also £1,000,000 for payments due on war ships purchased, in addition. He further said that after June 15, and until October 15, 10,000,000 taels per month would be required. The bankers asked for time to confer with their principals. Upon their own initiation the bankers drafted a plan whereby the payment and disbandment of the troops might be carried on under foreign supervision.
On May 2 the bankers again met Mr. Tang and Shih Chao-chi (Alfred Sze), the Acting Minister of Finance, and the plan aforesaid was submitted to them. It was rejected in the most pronounced way. The bankers asked the Chinese officials to suggest some other plan which might secure the end desired without offending Chinese susceptibilities. But to this suggestion no reply, so far, has been made.
On May 6 the four ministers, together with the Russian and Japanese ministers, met together for the first time to consider the loan situation. I expressed the opinion that the peace of the country was endangered unless money is furnished wherewith to pay troops and thereby prevent further outbreaks and riots. It was agreed that the situation was critical, and all the ministers expressed the desire to help the Chinese, but they thought we were face to face with the question whether or not large sums of money were to be handed over to the Chinese without any supervision over or check upon the expenditure or application of the same.
We were then informed that Tang Shao-yi had notified Mr. Hillier that Hsiung His-ling, the Minister of Finance, had arrived at Peking and would like to see the bankers at once, and that Mr. Hillier had replied they were ready to meet him at any time he named. I am informed, at this writing, that such conference is now going on between the Minister of Finance and the bankers.
I have, etc.,
Note.—On May 15, 1912, the bankers in conference at London telegraphed to their representatives a proposal of an agreement which is referred to occasionally in the subsequent correspondence. It was not perfected and adopted until June 20, under which date a summary of its provisions will be found.