File No. 893.51/1301.

The American Ambassador to Russia to the Secretary of State.

[Telegram—Paraphrase—Aide mémoire.]

Department’s February 10, 6 p.m. Ministry of Foreign Affairs replies as follows:

By an aide mémoire of January 30/February 12, 1913, the American Embassy proposed to the Imperial Government, as a compromise, that the number of foreign advisers which will be appointed in China in connection with the agreement in regard to the reorganization loan should be limited to three, of which the post on the board of the salt monoply should be offered to a Dane, in the loan bureau to a German, and in the control department to a Frenchman.

In all the negotiations connected with the Chinese reorganization loan the Russian Government has always had in view the purpose of establishing a control over the finances of China, which are at present in a state of confusion. The numerous interests which Russia has in China and her role of one of the chief creditors of that country fully justify similar position taken by us in this question.

It is obvious that such control can be effective and successful only if the foreign advisers who are to take charge of it are appointed by the interested powers, not by the Chinese Government, which has always known how to deprive foreign officials in its service of all influence in current affairs. On the other hand when the loan of 1895, guaranteed by Russia, was concluded, the [Page 159] Chinese Government informed the Russian Government that it would not give any foreign power any rights or privileges of any kind relative to the supervision of the finances of China or the management of such if such rights were not likewise extended to Russia (St. Petersburg declaration June 24/July 6, 1895; article 4). The Imperial Government, therefore does not see any reason why it should relinquish the right guaranteed to it by the said declaration, namely to have a Russian adviser in the financial management of China if the representatives of other powers are to take part in it.

In view of these considerations the Russian Government promised to support a project which was approved by the conference of the Ministers concerned in Peking on the initiative of their French colleague to the effect that the appointment in China of four foreign advisers be insisted upon, of which one Russian and one Frenchman should be in the control department, leaving the choice of an adviser in the salt monopoly to England and in the loan department to Germany.

The Imperial Government has no doubt that if the interested Governments will agree between themselves in regard to submitting this combination to China, the Government of the latter, whose pecuniary difficulties are increasing hourly, will not be able to avoid foreign control over the expenditure of money and the security of loans, the necessity of which is unanimously admitted in the interests of the creditors of China as well as in those of the country itself.

The delayed payments in connection with the “Boxer renunciation” could serve as the means of pressure on China for this purpose as the powers could demand that any loan concluded by China outside the six-power group should serve first of all to pay these arrears; and they could propose to the Chinese Government a delay of these payments only in case it should agree to the appointment of those advisers which will be suggested to it.

Shall I ask if by the above it is intimated that Russia would object to advisers from all six powers of which one should be American?