File No. 893.51/13–65.

The American Group to the Secretary of State.


Sir: Supplementing our letter of March 19th1 covering transactions with the Chinese Government in which we referred to certain arrangements already made by us jointly with the British, German, French, Russian and Japanese financial groups, we beg now also to call your attention to the two loans which we separately have made to the Chinese Government for the maintenance of its organization for the education of Chinese young men in the United States under the arrangement made following the remission by the United States of a portion of the Boxer indemnity. * * * We authorized Mr. F. H. McKnight, our representative in Peking, to contract to lend to the Chinese Government for the purposes mentioned above the sum of $200,000. This agreement, which was approved by the American Minister at Peking, was signed on the twenty-sixth day of November, 1912. * * * We have now advanced to the Provisional Government of China $160,000 on account of this loan of $200,000 contracted for on November 26th, 1912. In accordance with the request of the Chinese Government, communicated through Mr. McKnight, our representative in Peking, we shall, on the first of April, pay $25,000 in Washington to the order of Director Wong Ting for the account of the Chinese Government, and transmit the sum of $15,000 to Peking, which advances will constitute the final installments on account of this loan.

[Page 199]

Under a further contract dated January 14th, 1913, the American group agreed to loan the Chinese Government the sum of $185,000 to repay the advance obtained by it from the International Banking Corporation for the maintenance of students as described above. * * * January 17th, we deposited * * * with the International Banking Corporation in New York $185,000 to the credit of the Provisional Government of China and to the order of Mr. Wong Ting.

The agreements above mentioned were concluded with the approval of the American Minister in Peking, and copies thereof were filed with the American Legation at the capital and, we assume, were transmitted to the Department of State and are now included in your official records. These agreements provide that the loans above mentioned shall be paid from the portion of the Boxer indemnity which is refunded to the Chinese Government by the Government of the United States as each, payment of the indemnity is made by the former to the latter.

It is our understanding that with the consent of the powers Chinese indemnity payments have been deferred since November 1911. It has been our understanding, moreover, that these arrears would be liquidated from the proceeds of the reorganization loan. Inasmuch as we have withdrawn from the negotiations therefor, as we stated in our letter to the Department on the 19th instant, we now lay this matter before you and beg to request that at such time as you shall deem convenient you will take such steps as may be necessary to arrange for the payment of these obligations by the Chinese Government.

Very truly yours,

Willard Straight.
  1. See p. 171.