File No. 893.51/1747
The Secretary of State to Minister Reinsch
Washington , February 21, 1917, 5 p.m .
Your telegram of February 15, 7 p.m. The Chinese Legation states that according to contract bankers still have few days before expiration of time within which they must say whether they will exercise option. The Minister has had several conferences with bankers endeavoring to expedite negotiations but bankers insist on four months extension of option and state impossible now to make advance.
The Department some time ago was informed by bankers that Japanese activities through American press criticising the five million loan would make difficult to float proposed larger loan. Today representative of bankers presented telegram from bank saying difficulty was not merely [apparent omission] but need of making exhaustive investigation before assuming obligation for so large a sum; that bank is thoroughly in earnest and means to do real business but existing circumstances require extension of time to enable bank to carry out successfully any undertaking it might assume. Telegram states that a director of the bank is now either in China or en route and although without official authority will make investigation which will be followed by more thorough investigation if extension of option granted. In that case one of the executive officers of the bank will likely be sent to China. You may urge extension of option and telegraph result.