File No. 893.811/204

Minister Reinsch to the Secretary of State


Your December 28. The Chinese Government would be willing to extend option but the expectation of people of Provinces concerned is that work ought to be begun. If bankers are willing to finance restoration of Grand Canal from the Yangtze to Techow at cost not to exceed $3,000,000 gold, on security of canal tolls estimated at $500,000 gold yearly with Government guarantee, the Government will renew option. Canal would have exceedingly large carrying trade, work would be independently useful, and give engineers experience of the region for eventual use in larger enterprises.