File No. 893.811/104.
The Counselor of the Department of State, as Chairman of the International Relief Board of the American National Red Cross, to the President.
Washington, January 26, 1914.
My Dear Mr. President: This letter is written by me as chairman of the International Relief Board of the American Red Cross. It relates to certain proposed river conservancy work in China with a view to prevent destructive floods and resulting famines. Suggestions have been made for a conference with you, but it seems to me that you can deal with the subject more conveniently in writing.
In May 1911, after the famine of 1910–11 in the Provinces of Anhui and Kiangsu had somewhat abated, the American Red Cross, which had contributed largely to the relief of the sufferers, made to the Chinese Government through the Department of State an offer to send an expert engineer to China to make a thorough examination of the afflicted region lying along the Huai River with a view to the formulation of a plan to prevent the recurrence of devastating floods. The Chinese Government accepted the offer and agreed to furnish the necessary assistance to the American engineer and to pay the field expenses of the surveying party.
The Red Cross selected as an expert engineer, Mr. C. D. Jameson. He arrived at Peking in July 1911, and, with the assistance of the American Legation, promptly concluded the necessary arrangements for his work. On July 30, 1912, after spending almost a year in making surveys and investigations in the flood and famine region, he made a preliminary report, which was presented to the President of China and to this Department. The Department, after examining the report, expressed to the Chinese Government the hope that it would find in the report some practical suggestions looking to the collection of further technical data and the making of plans and estimates through a commission of engineers, and that it would, meanwhile, lend its aid to the adoption of measures for the provisional protection of the inhabitants and the prevention of another famine in the Huai valley. Representations were also made to induce the Chinese Government to proceed with the work along the lines laid down in Mr. Jameson’s report and under his supervision.* * *
In December last the Chinese Government, through the American Legation at Peking, offered to the American Red Cross an option for one year to raise money and to make a contract for the carrying out of the work of conservancy. Since that time such progress has been made that the Chinese Government has offered to the American Red Cross a form of contract, in which it is proposed that the Red Cross shall undertake to provide contractors and funds for carrying out the work. Such a contract the Red Cross deems itself to be precluded from making, but that there is every reason to believe that the Chinese Government will accept a counter-proposal of the Red Cross under which the latter is within a year to find a responsible contractor and, for the supervision of the work, to name an American engineer. The contractor will make his own terms with the Chinese [Page 100] Government. The Red Cross can not enter into engagements which would give it an interest in an enterprise carried on for profit.
The American Red Cross is advised that the contracting firm of J. G. White and Company of New York, which is among the largest and most responsible contracting firms now in existence, stands ready to enter into a contract with the Chinese Government for the performance of the work on a moderate basis of profit, say, ten per cent of the value of the work done, and that this company would, as the Chinese Government requires, accept payments largely in bonds of that Government. This would obviously necessitate the conclusion of an arrangement between the contractors and responsible bankers, through whose marketing of the bonds the contractors would receive the moneys necessary to the carrying on of the work.
This is the only feasible plan by which the end in view can be obtained. If it is not accomplished in this manner under American auspices, it must, if accomplished at all, be done in the same manner.* * * The Red Cross is, however, advised that neither contractors nor bankers will enter into the work unless an assurance is given by the Government of the contractors that it will lend to the latter its good offices and diplomatic support in carrying out the work. Such an assurance to the contractors would be deemed by them to be essential not only for their own justification in entering into such an enterprise in China, but also for the justification of the bankers in agreeing to take from the contractors the bonds of the Chinese Government at a certain figure.
Mr. Jameson estimates that the cost of the conservancy work would be $20,000,000; that it would result in the draining of an area of some 17,000 square miles, and that it would throughout this area lower the flood level to such an extent that in all but abnormal years two crops would be possible in each year, whereas, under present conditions, on an average only two crops in five years can be made. In addition to this improvement in the area now normally under cultivation, Mr. Jameson estimates that there would be reclaimed some 6,000,000 Chinese mou (1,000,000 acres) of land which is now practically valueless, being covered with shallow lakes or swamps, and in this relation he points out the great saving that would result in the cost of annual famine relief, for which in recent years many hundreds of thousands of dollars have had to be spent in this section. In conclusion Mr. Jameson says:
The moral results will be the elimination of the suffering, starvation and degeneration of several millions of people, who now are fast becoming beggars and robbers; the turning into producers of these millions who now are not only nonproducers, but are becoming a menace to the country and cause of unrest and lawlessness.
I may add that the Red Cross has been considering the possibility of securing the services as engineer of one of our own Engineer Corps prominently employed in the construction of the Panama Canal.
The question immediately before us is whether the Government of the United States will give the assurance of good offices and diplomatic support in behalf of the American contractor, should he be able to agree with the Chinese Government on fair and equitable terms.
Very respectfully yours,