File No. 893.51/1337b.

The Secretary of State to the American Ambassador to France.

[Telegram—Paraphrase—Aide mémoire.]

Communicate at once the following aide mémoire to the Government to which you are accredited:

The American Government greatly regrets that the negotiations for the Chinese reorganization loan, which have consumed so much time and labor, should on the very eve of their successful consummation be threatened by the introduction of new and unexpected questions of a purely political nature. As has already been stated, this Government in the interest of an early adjustment of the question has been willing to accept as foreign advisers connected with the loan either the nominations made by the Chinese Government or nominees from the lending powers. In view, however, of the difficulties that have arisen as to appointments from the lending powers and the information it has just received of the unwillingness of the Chinese to accept the various extensive changes in the program that have been suggested, the American Government would suggest as a compromise solution that the original nominations of the Chinese Government to the posts of chief supervisor of salt administration (a Dane) and director of the national loan bureau (a German) be accepted and that the interested Governments propose for the third post, that of director of audit department, a Frenchman. The American Government would point out that it has thus far made for itself no claims in this connection although the American group will issue on their own account their full share of the loan, preferring that the appointments be made on a basis of efficiency rather than of nationality. Should the number of advisers, however, be increased beyond the original three contemplated, this Government must reserve on behalf of its nationals all rights and privileges accruing to them under the terms of the sextuple agreement.

Repeat to London, Berlin, St. Petersburg for like action. Same to Tokyo to be repeated to Peking, for information.