File No. 893.51/1369.
The American Group to the
Secretary of State.
Sir: We beg to enclose herewith, for your
information, copy of the telegram which we have received today from
Messrs. Morgan, Grenfell & Co., in response to our telegram
announcing our withdrawal from the negotiations for the reorganization
loan, copy of which telegram was transmitted to you with our letter of
March 19th. We also beg to enclose copy of our reply to Messrs. Morgan,
Grenfell & Company’s telegram of today’s date, together with a copy
of the telegram which we have received from Peking in response to our
message, copy of which was yesterday forwarded to the Department.
Very truly yours,
[Page 179]
[Inclosure 1.]
Morgan, Grenfell & Co. to the
American Group.
Reorganization. We have received from C. S. Addis following letter:
I have communicated your letter of March 20th to other
members of the six-power consortium, who share regret of the
American group at severance of associations and will do
their best give effect to desire American group that their
withdrawal should be complete. For the American group to
relinquish participation in reorganization-loan and
currency-loan contracts would not appear to present any
great difficulty. As regards sextuple agreement, however,
there are no means of releasing any of the signatories until
reorganization loan has been issued or abandoned or period
of five years has elapsed. It would appear therefore that
American group remains bound by provisions sextuple
agreement until one or other of these events has taken
place, but remaining five groups trust they are correct in
assuming that neither American group nor any of its
individual members will enter into competition with them for
Chinese business during that period.
We have already assured C. S. Addis informally that we are sure it is
not intention of American group or its members to enter into
competition with their late colleagues in the consortium, but we
would be glad to be able to convey to him officially your
confirmation of this.
[Inclosure 2—Telegram.]
The American Group to
Morgan, Grenfell & Co.
Reorganization. Refer to your telegram of today. Although because of
circumstances over which we have no control we have withdrawn a from
negotiations for reorganization loan, we shall, like all other
parties to sextuple agreement be bound by provisions thereof until
the agreement is terminated and we trust that you will at once
advise Mr. Addis for communication to other groups that neither
American group nor any of its individual members would consider
undertaking any Chinese business either directly or indirectly in
competition with other parties to sextuple agreement as long as that
agreement remains in force.
We should be glad to hear what steps, if any, British, French and
German groups desire us to take with regard to currency-loan
negotiations. Right of groups issue this loan was extended to April
14th and we assume that unless further extension is requested by us
and granted by Chinese Government contract will lapse subject always
to repayment of £400,000 advance. We should also like as soon as
possible to settle our share of joint expenses account of
reorganization and Hukuang loans to date and receive from British,
French and German groups their share expenses incurred by us in
connection with currency loan.
[Inclosure 3.]
F. H. McKnight to the American Group.
Although not desirable [to] press now for payment Treasury bills, I
believe it is very important, in view of unsettled political
conditions here, that they be not extended but left overdue and
therefore payable any time.
