Papers Relating to the Foreign Relations of the United States, With the Address of the President to Congress December 4, 1917
File No. 893.77/1583
Minister Reinsch to the Secretary of State
Peking, January 3, 1917.
Sir: Referring to previous correspondence in which the Legation has reported in regard to an agreement, under date of October 5, 1913, between the Chinese and Japanese Governments, whereby the right to construct certain railways in South Manchuria was conceded to the nationals of the latter, I have the honor to enclose herewith what [Page 162] I believe to be a reasonably accurate English version of the agreement for the construction of a railway from Ssupingkai to Chengchiatun, concluded on December 27, 1915, between the Chinese Government and the Yokohama Specie Bank.
In this connection, I take occasion to forward for the information of the Department a copy of the note (No. 511) which I addressed to the Acting Minister for Foreign Affairs under date of October 13 last, asking for such information in regard to the Japanese railway concession in South Manchuria as might enable it to satisfy itself that such grants as may have been made to any third party are not such as to impair the rights already vested in American interests by virtue of the Chinchow-Aigun Railway Agreement of October 6, 1909.
My purpose in placing this inquiry before the Foreign Office was not only to reserve existing American rights, but also to direct attention to the apparent infringement of those rights by Japanese interests which at the same time are bringing into question, on the basis of an expectant reversion of German special interests in Shantung, the validity of the American contract of April 1929 last for the improvement of the Grand Canal in that province.
As will have appeared to the Department from my telegrams of December 29, 10 a.m., and January 2, 8 p.m.,30 I consider that the introduction of a Japanese interest into the Canal projects in either Shantung or Kiangsu would be in the highest degree repugnant to the Chinese, and would directly inject into those projects a political character from which they have hitherto been entirely free—the very terms used by the American International Corporation, in its telegrams to its representatives here, holding out the threat that, in spite of its being unwelcome to the Chinese, Japanese interests are prepared to force their way into the projects alone if not in cooperation with the American interests now concerned. If the Japanese financial interests are sincere in the desire to cooperate with Americans in commercial and industrial undertakings in China, on a basis wholly of business and without any implication of special political interests, it would seem that a more fitting field of cooperation would be that of railway construction in South Manchuria, in respect to which our nationals possess actual rights. An opportunity would thus be given to the Japanese to reconcile with ours the rights which they appear to have obtained secretly in disregard of our prior claims, instead of ousting us from those rights in Manchuria and simultaneously claiming the privilege of cooperating with us in our Canal projects as a matter of comity.
In order to convey such an intimation to my Japanese colleague, I am today addressing to him a personal note, of which a copy is enclosed herewith, asking for such information as he may feel disposed to give me as to Japanese railway concessions in South Manchuria, with a view to the possibility of cooperation by American interests—either those already possessing rights by virtue of the Chinchow-Aigun Agreement, or others. The reference, in this note, to comments by a member of the Japanese Legation on the subject of cooperation between Japanese and American interests, is to a recent conversation in which Mr. Debuchi, Secretary of the Japanese Legation, urged upon Mr. White, of this Legation, the desirability of such cooperation, [Page 163] laying especial emphasis on the fact that joint action with nationals of Japan would give American bondholders the security of having at all times available for the protection of their interests in China the military power of Japan.
I have [etc.]
agreement for the building of the ssupingkai-chengchiatun railway, december 27, 1915
December 27, 1915 (4th year of the Republic, according to the Chinese chronology, and 4th year of Taisho, according to the Japanese chronology), the Chinese Government (hereinafter called the Government), represented by the Minister of Finance and the Minister of Communications, of the one part, and the Yokohama Specie Bank (hereinafter called the Bank), of the other part, have concluded between themselves the present agreement on the basis of the agreement in principle which was arranged between the Chinese and Japanese Governments on October 5, 1913 (2d year of the Republic, according to the Chinese chronology, and 2d year of Taisho, Japanese chronology).
Article 1—The Government authorizes the Bank to issue a 5% Gold Loan in the sum of 5,000,000 Yen. The Loan will bear the date of the day of issue, and will be known as the Chinese Government 5% Loan for the building of the Ssupingkai-Chengchiatun Railway.
Article 2—The present loan is for the building of a railway from Ssupingkai to Chengchiatun. The route between the said points will be determined by the Ministry of Communications after the completion of investigations which will be made by the representatives of the Government and the Bank.
Article 3—The capital obtained from the loan above mentioned is set apart exclusively for the building of the road, including the payment for the expropriation of land, acquiring rolling-stock, and other necessary equipment (or materials), and also expenses for the operation of the road and for the payment of interest on the present loan during the period of construction of the said road.
The work must be started not later than six months after the signing of this agreement, and must be finished if possible within two years of the day of starting the same. Before the end of six months the Bank will place at the disposition of the director general of the road a sum not to exceed 200,000 Yen as an advance upon the loan, which money will be deposited in Japan or remitted to China in accordance with the instructions of the director general. The sum so advanced, together with the interest which will be charged on the account at a rate not over 7 % per annum, will be withheld by the Bank from the proceeds of the first bonds issued. The advance will be paid in Shanghai Taels.
Article 4—The interest on the present loan will be calculated at the rate of 5% per annum on the nominal value of the bonds from the day of issue of the loan, and the payment of interest to the bondholders will be made semiannually. During the period of the building of the road, the Government will pay the interest either from the principal of the loan or from other sources, at its discretion, and when the building is finished the interest will be paid first from the revenue of the road and thereafter from other State revenues at the discretion of the Government. Interest, which as above stated will be computed from the day the loan is issued, will be payable 14 days in advance of the expiration of each half-yearly term in accordance with the amortization table annexed to the agreement.
Article 5—The term of the loan shall be forty years. The amortization of the principal shall begin from the 11th year from the day of issuing the loan, and shall be carried out by means of half-yearly instalments, 14 days in advance, in accordance with the amortization table (except in the case anticipated in the 6th Article of the agreement), and will be paid from earnings of the road or from other Government revenues at the discretion of the Government.
Article 6—The Government reserves to itself the right, upon notice to the Bank in writing six months in advance, beginning with the 11th year after the issue of the loan, to pay off, if it desires, before maturity, all or part of the principal which has not been amortized, upon condition that the holders of the bonds are to be paid a premium at the rate of 2½% above the par value of the bonds, i. e., upon each bond of 100 Yen will be paid 102 Yen 50 Sen. At the end [Page 164] of the 20th year after the day of issue of the loan, the Government may increase the amounts of the amortization payments, without paying a premium over and above the par value. Such payments before maturity will be carried out by means of a supplementary drawing of bonds upon the days fixed in the prospectus of the loan for the usual drawings.
Article 7—The Government binds itself to make the payments of the interest and principal of this loan, in accordance with Articles 4 and 5 of this agreement, to the Bank through the director general, according to the attached amortization table, but 14 days in advance. For payments to be made before maturity in accordance with Article 6, the Government likewise engages to make the required payments 14 days in advance. All of the above-mentioned payments are to be made by the Government to the Bank at Shanghai, in Shanghai Taels (or in new Government money, if such has been introduced into circulation) at the current rate of Japanese exchange. The rate of exchange will be arranged by agreement with the Bank either on the day of payment or, as the Government may prefer, on any day not more than six months previous to the day of payment. The Government shall have the right to make such payments in gold if they have such funds in Japan (upon condition, however, that those gold funds shall not have been acquired especially for the purpose of making this payment), and such payment in gold must also be made 14 days in advance. For its services in making the payments upon the present loan the Bank will receive a commission at the rate of ¼% on all payments effected through it.
Article 8—The Government guarantees the regular payment both of the interest and of the principal. In case the amount of the loan or the revenue from the road shall not be sufficient for the above-mentioned payments, the Government will adopt the necessary measures to ensure these payments from other sources, which payments must also be effected 14 days in advance of the stated term.
Article 9—The present loan is secured upon all movable and immovable property belonging to the railway, or which may belong to it in the future, and also upon the revenues of the road. These properties and revenues are given over to the Bank as security. In case a supplementary loan is concluded according to Clause 1 of Article 15 of this agreement, the said property and revenues of the road will also serve as security for such supplementary loan. Movable and immovable property of the railway cannot be used as security for any other loan whatsoever.
Article 10—The Bank has the right to issue bonds for the full amount of the loan, and the nominal value of the bonds will be determined by the Bank. The form of the bonds will be determined by the Bank in agreement with the Minister of Communications or with the Chinese Minister at Tokyo. The bonds shall be printed in the Chinese and Japanese languages and shall be signed and sealed by the Minister of Communications. Previous to the issue of the bonds they shall also be signed by the Chinese Minister at Tokyo as proof that the issue has been effected with the permission of the Government and under its responsibility. The bonds will also be signed by the representative of the Bank. If bonds are lost, damaged, or stolen, the Bank will immediately notify the Minister of Communications or the Chinese Minister in Japan, who shall authorize it to advertise in the press that payments upon the same will not be made, and also to take the necessary measures in conformity with the laws of the said country. If the lost bonds are not discovered before the date fixed by the Bank, the Minister of Communications or the Chinese Minister at Tokyo will deliver to the Bank duplicate bonds with the proper signatures and seals, and all expenses for printing these bonds will be borne by the Bank.
Article 11—During the whole currency of the loan, the bonds and coupons and also all operations connected with the payment of the principal and interest, will be exempted from Chinese taxation.
Article 12—All details in regard to the publication of the prospectus of the loan and the payment of the principal and interest, not set forth in this agreement, shall be determined by the Bank upon agreement with the Chinese Minister at Tokyo. The Bank is authorized to issue the prospectus within the shortest possible time after the signing of this agreement (observing the reservation in Article 13 of this agreement). The Chinese Minister at Tokyo shall be instructed to sign the prospectus of the loan and also to cooperate with the Bank in all questions touching on the issue of the loan.
Article 13—The Bank shall have the right to issue the entire loan either at one time or in several series, depending upon the cost of the work, and its satisfactory execution, and also upon the condition of the money market. The [Page 165] Government shall receive for the bonds the issue price less a deduction of 5½% of their nominal value, which will be retained by the bank as indemnification for the expense of issuing the loan.
Article 14—The proceeds of the loan shall be deposited to the credit of the railway in the Yokohama Branch of the Bank, at the times indicated in the prospectus of the loan for the subscribers to the same.
The Yokohama Branch of the Bank will pay upon the credit balance of these funds interest at the rate of 3% per annum, and on sums transferred to China the local branches will pay the interest that is customary on such accounts. The Bank will retain, at the disposal of the director general, all sums realized from the sale of the bonds, with the interest thereon, deducting, however, the sums necessary for the payment of interest upon this loan and commissions upon such payments during the period of construction of the road. In the case of payments exceeding 200,000 Yen, the director general must advise the Bank 10 days before effecting the payment. The entire loan is to be expended for the building of the railway in proportion to the progress of the work and as need may arise, for which written requisitions must be presented to the Bank, signed by the director general and the chief accountant, with a statement attached, showing in detail the object of the disbursement, and specifying the cost. Every month the appropriations for the building of the railway will be remitted to Shanghai according to the instructions of the director general, and will be placed to the credit of the account of the road in the said branch of the Bank. The director general, in agreement with the Bank, will appoint a Japanese subject as chief accountant. The chief accountant will prepare a list of the necessary Chinese and Japanese clerks for conducting the bookkeeping department, and present the same to the director general; upon his approval of the list, and upon the appointment by him of these persons, they shall be placed at the disposition of the chief accountant, for the performance of their duties under his direction. The chief accountant, under the supervision of the director general and the managing director of the road, shall have charge of all revenues and expenditures of the road during the whole term of this loan, and shall sign conjointly with the managing director of the road all documents relating to the expenditure of such sums. The accounts of the road will be kept in the Chinese and Japanese languages, according to the methods adopted for the other Chinese railways.
The management of the road will periodically publish, in the Chinese and Japanese languages, a statement showing the revenue and expenditure of the railway, for the information of the public.
Article 15—In case the principal obtained from the floating of the present loan, together with accrued interest, is not sufficient, after deduction of the percentage necessary for the payment of the coupons, during the period of construction, for the completion of the road and for meeting the expenses connected with it, the Government must furnish, from Chinese sources, the necessary funds for the uninterrupted continuation of the work, but in case a sufficient amount is not available, the Bank may issue a supplementary loan on the same terms as the loan provided for in this agreement. If upon the completion of the building of the road a surplus remains, such surplus money will be carried as reserve capital, in conformity with Article 18, as security for the regular payment of the principal of the present loan.
Article 16—The building of the road and the management of the road will be entirely in the hands of the Government.
The Government will appoint the director general of the road, whose place of residence must be near the place where the road is being built, and who will be furnished with full power to act in the name of the Government within the limits of this agreement. The director general, upon agreement with the Bank, will appoint as chief engineer, under contract, a Japanese subject. It will be the duty of the chief engineer, under the supervision of the director general and the managing director of the road, to make surveys, prepare plans, drawings, estimates, etc., to direct the technical part of the work, to purchase needed materials, rolling-stock, etc. The chief engineer will submit for the consideration of the director general a list of the necessary Chinese and Japanese technical staff for the construction work, exactly designating their number and their functions. The director general, upon approving this list, will appoint these technicians and place them at the disposition of the chief engineer for the performance of their duties under his direction. Appointments to the minor positions, and also dismissals, will be made by the chief engineer with the consent of the director general and the managing director of the road. As the construction of the separate sections of the road is completed, they will be turned over, by the chief engineer, to the [Page 166] director general, who will open them for operation if this is considered advisable. The traffic manager shall be a Japanese subject, and he shall discharge his duties in compliance with the instructions of the director general and the managing director of the road. The duties of the chief engineer will cease upon the completion of the building of the road. The director general shall then appoint a Japanese engineer whose duty it will be to supervise the engineering department under the orders of the director general and the managing director of the road. The Japanese engineer and traffic manager will be appointed, under contract, by the director general, upon agreement with the Bank.
Article 17—For the purpose of guarding the railway line, there shall be maintained a Chinese guard detachment under the command of Chinese officers. All expenses connected with the maintenance of the detachment shall be paid from the amount destined for the building and maintenance of the road. The numerical strength of the detachment shall be determined by the director general upon agreement with the Bank. If the detachment proves to be insufficient, the management of the road shall request the Government to send as guards a detachment of troops of either the central or provisional Government, and the expense for their maintenance shall be borne by the corresponding authorities.
Article 18—The income of the railway shall be deposited in the Bank on either short or long term deposits, and the Bank shall pay interest at rates arranged by mutual agreement between it and the Government. The expenses of operation and upkeep of the road will be paid from the revenue of the road; the net balance of the revenue will first be applied towards the payment of the principal and interest on the loan, in accordance with the annexed amortization table, and the surplus remaining after the above-mentioned payments shall be held at free disposal of the director general.
After the completion of the building of the line and its opening to traffic, the amounts designated for the payment of principal and interest on the loan shall be handed over to the Bank six months in advance of the dates specified in the amortization table. In case the revenue of the road is insufficient to cover the expenses for the payment of interest on the loan and the liquidation of the principal, these payments shall be secured by the means indicated in Article 8 of the present agreement.
Article 19—During the period of the building of the road, a person designated by the Bank shall act as the agent of the road for the purchase abroad of all necessary building materials, rolling-stock and other articles. The more important of these purchases will be made by the director general by means of tenders. It will be the duty of the agent, who will act as middleman, to furnish the required materials on the terms most advantageous to the road, and as compensation for this service he shall retain for himself 5% of the net cost of materials procured in this way from abroad. All supply contracts shall be made through the chief engineer with the approval of the director general. It shall be the duty of the agent, who will be responsible for the strictest inspection of the materials obtained, to select materials of the best quality; the management of the road has the right to refuse to accept materials if they are not in accordance with the specification previously adopted. Building materials, rolling-stock, and other articles of Japanese origin will be given preference before merchandise of other origin if the Japanese merchandise is of the same quality and the same price; after Japanese materials, preference shall be given to foreign merchandise recommended by the agent. Original bills for purchases of materials, and customs certificates, must be presented to the director general; in case discounts are allowed from the established prices, these amounts must be credited to the account of the railway; the agent is required to present all vouchers, certificates of manufacturers, etc., required by the management of the road.
Aside from the above-mentioned commission, the Bank shall not retain for its own profit any other sums. In case the management invites, for consultation, additional experts and engineers, all expenses in this connection will be charged to the account of the road.
To encourage Chinese industry, materials and merchandise of native origin, if the qualities and prices are the same as similar goods of foreign origin, shall be given the preference; for the purchase of such merchandise, of Chinese origin, the Bank shall not receive a commission. Upon the completion of the building of the road, the person designated by the Bank shall continue as agent of the road, for supplying necessary materials, during the whole period while this agreement is in effect, under conditions which shall be arranged later.
Article 20—If, in the future, the Government deems it advantageous or desirable to extend the railway line or to build a branch, this work can be done with [Page 167] money obtained from Chinese sources; if, however, foreign capital is wanted for that object, the Government is obliged to give the preference to the Bank. The length of these additional lines shall be determined by the Government.
Article 21—The Bank, being the agent of the bondholders, shall deal with the management of the road in all matters concerning the railway, as the representative of the bondholders.
Article 22—Should any events of a political or economic character occur in the country during the period between the signing of the present agreement and the issuing of the prospectus of the loan, which would have an injurious effect on the money market and cause a decline in Chinese securities, and in consequence cause the Bank difficulty in issuing the bonds for the present loan, the Government by mutual agreement with the Bank shall grant to the latter an extension of the time for carrying out the conditions of the agreement. If at the expiration of the designated time the loan has not been issued, the present agreement shall be considered as canceled. The Government in that case will repay to the Bank the advance made according to Article 3 of this agreement, with accrued interest, and the Bank shall be entitled to no other compensation.
Article 23—The Bank is authorized, with the consent of the director general, to transfer the rights which it has obtained by this agreement, either wholly or in part to another Japanese subject, or to entrust them to another person as its attorney: this person shall assume by that act the obligations of the Bank.
Article 24—In order to secure a wide distribution of the bonds, the Bank will be given the right to express the price of the bonds in English, French and American currencies; the bonds will be printed in the Chinese, Japanese, English and French languages; the places of payment of the principal and interest on the loan, to the holders of the bonds, will be London, Paris and New York, and the Bank may issue the bonds either wholly or in part in the three cities named.
Article 25—The present agreement, with its annexes, was ratified by the President of the Republic of China on the——of December of the year 1915 (4th year of the Chinese Republic, and the——December, 4th year of the Reign of Taisho, in Japanese chronology), regarding which an official communication was made by the Minister for Foreign Affairs to the Japanese Minister at Peking.
Article 26—The present agreement is drawn up in four copies in the Chinese language and four copies in the Japanese language, of which three copies in each language will be delivered to the Government and one copy of each will be kept by the Bank. Should it happen that there be a divergence between the texts of the Chinese and Japanese copies, the Japanese text will be given the preference.
December 27, 4th year of the Republic.
annex i
December 27, 1915 (4th year of the Republic, according to the Chinese chronology), and December 27, 1915 (4th year of the Reign of Taisho, according to the Japanese chronology), the Chinese Government (hereinafter called the Government) and the Yokohama Specie Bank (hereinafter called the Bank) concluded between themselves an agreement for a loan for the purpose of building a railway line from Ssupingkai to Chengchiatun. With the object of accomplishing the earliest possible completion of operations, the parties have concluded also the following supplementary agreement. With regard to points not mentioned in the present annex, the text of the original agreement continues to be in force.
- Article 1—Having regard to the fact that, in consequence of the European War, which has affected the money market most seriously, it is acknowledged that it is not feasible to issue the bonds at present, the Government, having it in view to start immediately building the Ssupingkai-Chengchiatun Railway, is borrowing from the Bank 3,400,000 Shanghai Taels.
- Article 2—The Bank reserves to itself the right to return to itself the amount advanced, with accrued interest, in accordance with the first part of Article 13 of the agreement, from the amount received from the sale of bonds. The Government and the Bank must decide by mutual agreement the question of the feasibility and advantageousness of issuing the bonds.
- Article 3—The present advance is destined exclusively for the expenses of building the Ssupingkai-Chengchiatun Railway, which include payment for the expropriation of land, purchase of rolling-stock, acquiring every kind of material and other articles required, and also the payment of interest while building, and tor operating the road.
- Article 4—The payment of the interest on this advance will be effected 14 days in advance of the due date, from the amount of the advance, during the [Page 168] period of construction of the road, and, upon completion of the construction, first of all from the revenues of the road and then, in case they should be insufficient, from other Government revenues.
- Article 5—The Government guarantees punctuality in the payment of the principal and interest of the present advance: if this advance and also the revenues of the roads shall not be sufficient for the payment of interest and for the liquidation of the principal, the Government will make the necessary payments from other sources.
- Article 6—Previous to the issue of the bonds of the Ssupingkai-Chengchiatun Railway, the revenues of the railway, and also all property of the road, movable and immovable, already in existence or which may belong to it in the future, shall be considered as given to the Bank as security for this advance.
- Article 7—The amount of the present loan shall be paid into the Shanghai Branch of the Bank for account of the Ssupingkai-Chengehiatun Railway, and the Bank will pay the usual interest on this account. If the director general wishes to debit this account, at any one time, in a sum exceeding 200,000 Taels, he must inform the Bank 10 days in advance.
- Article 8—The present advance will be expanded in proportion to the requirements for the surveys and for the work of building the road, and the money will be paid by the Bank upon the presentation to it of a written order, signed by the director general and the chief accountant, supplemented by documents exactly designating the kind and cost of the work which is being undertaken.
December——, 4th year of the Republic.
Minister of Finance
Minister of Communications
December——, 4th year of the reign of Taisho.
Representative of the Yokohama Specie Bank
annex ii—loan letter
- 1
- —The Chinese Government, in the person of the Minister of Communications, has borrowed from the Yokohama Specie Bank the sum of 3,400,000 Shanghai Taels. This money will be paid by the Bank either all at one time or by instalments, on separate receipts.
- 2
- —Interest, which will be computed at the rate of 7% per annum, will be paid by the Government semi-annually, counting from the day the loan is concluded.
- 3
- —The other terms of the loan are stated in the annex to the agreement concluded between the Chinese Government and the Yokohama Specie Bank, for the building of the Ssupingkai-Chengchiatun Railway, on December 27, 4th year of the Chinese Republic, corresponding to December 27, 4th year of the Reign of Taisho.
——day, ——month, ——year of the Chinese Republic:
——day, ——month, ——year of the Reign of Taisho.
Due dates for the payment of interest and the amortization of the principal of the 5% Loan in the sum of yen 5,000,000, concluded for the purpose of building the Ssupingkai-Chengchiatun Railway.
[Amortization Schedule not printed.]
Minister Reinsch to the Acting Minister for Foreign Affairs
Peking, October 13, 1916.
Excellency: I have the honor to recall to your excellency that on October 6, 1909, there was signed a preliminary agreement between the Viceroy of Manchuria and the Governor of Fengtien, on behalf of the Manchurian Administration, and the American Group, for the construction of a railroad from Chinchow to Aigun, through Tsitsihar; that this agreement was ratified on January 20, 1910, by an edict of the Imperial Government of China: and that subsequently, in April, 1910, under the authority of the Chinese Government, the Viceroy of Manhcuria and the Governor of Fengtien concluded with the American Group the final agreement for the financing of the project contemplated by the preliminary agreement. Although, for reasons which it is not necessary to recapitulate [Page 169] at this time, the ratification of this final agreement has been postponed, yet the rights accruing to the American Group under these arrangements have never been relinquished, but, as has from time to time been made known to the Chinese Government in behalf of the American interests concerned, have been expressly reserved and continued.
In view of the rights thus accruing and reserved in favor of American interests, this Legation has noted with some solicitude the rumors current for some time to the effect that the Chinese Government has granted to certain Japanese interests the privilege of constructing certain railway lines in Manchuria which, if not actually in conflict with the prior grant to American interests, would at any rate prove such as to impair the value of the rights conferred upon the American Group in connection with the Chinchow-Aigun Railway. While feeling confident that the Chinese Government cannot have intended to act in this matter in derogation from its obligation to the American interests concerned, the legation, nevertheless, feels it its duty to satisfy itself that such grants as may have been made to any third party are not such as to impair the rights of the American interests hitherto established. I have therefore to request that your excellency may be so good as to advise me as to the truth of the reports of railway concessions to Japanese interests in South Manchuria; and, in a proper case, to furnish me such data in regard thereto as may make possible the decision whether these concessions are wholly compatible with the existing rights of American citizens.
I avail [etc.]
Minister Reinsch to the Japanese Minister
Peking, January 3, 1917.
My dear Colleague: I have the honor to seek an informal and personal expression of your views in a matter which is of much interest to me. There has, as you know, been much discussion in both Japan and the United States as to the possibility of cooperation between the financial interests of our several countries in undertakings of a purely industrial and commercial character in China; we have sometimes touched upon this in talking together, and I have learned with great interest from Mr. White of a conversation with him in which the Secretary of your Legation stated his hearty personal advocacy of such cooperation.
If I am rightly informed, the contract concluded by the Yokohama Specie Bank, about a year ago, for the construction of the Ssupingkai-Chengchiatun Railway, contained a provision for the flotation of bonds of the contemplated loan in New York, as well as in London and Paris. And I have conceived that in that fact there may be a concrete indication of a desire, on the part of Japanese financial interests, to seek the cooperation of American finance, either of the Group which already possesses certain rights in regard to the construction of a line from Chinchow, via Tsitsihar, to Aigun, under the Preliminary Contract of October 6, 1909, or of some other American bank or syndicate which might be found ready to participate in industrial undertakings in Manchuria.
My inquiry is of necessity rather vague, and of course wholly informal, as I am only very imperfectly informed as to the scope and character of the concessions for the construction of railways in South Manchuria, which are generally understood to have been granted to Japan during the past three years or so; and I have, moreover, no information as to any definite and concrete proposals having been made by either side with a view to realizing cooperation between American and Japanese financial interests along the lines indicated. I should, however, be glad of an opportunity to discuss this matter with you and to learn your views as to the eventual possibilities of such action: and I should be most grateful for any information you might feel disposed to give me, as to the agreements regarding the construction of railways in Manchuria by nationals of Japan, to facilitate a consideration of those possibilities.
With the assurance [etc.]
- For. Rel. 1916, p. 115 ↩
- Printed under Huai River and Grand Canal Conservancy, p. 207.↩