File No. 893.51/1267.

The American Ambassador to France to the Secretary of State.


The German Ambassador claims that an agreement to internationalize Chinese loan was made two years ago and strongly urged adherence to the agreement. I have seen the Minister for Foreign Affairs and argued that since internationalization would make securities [Page 150] more liquid and valuable for all groups, and since French group strongly urged internationalization, the Minister of Finance should withdraw his objection. The Foreign Minister finally admitted that the real reason was fear of Chamber of Deputies refusal to consent on account of Germany. British Ambassador protested against French demand for six foreign advisers as contrary to original plan. I said that I thought insistence on six foreign advisers might cause failure of loans. The real cause of the refusal, I believe, is Russia.