File No. 893.811/256
Minister Reinsch to Secretary of State
Peking, April 14, 1917.
Sir: In continuation of my No. 1386 of February 13 relating to the Grand Canal contract, I have the honor to report that the first impression concerning the action of the International Corporation in this matter appears to have grown much stronger with both Chinese and foreigners in China in a most unfavorable sense.
The representatives of the International Corporation sounded Mr. Pan Fu who is in charge of conservancy matters; this was done on the basis of merely having a portion of the bonds placed in Tokyo. Although the Chinese officials severely disapproved of the action of the Corporation they were forced by circumstances to swallow their disgust and to assume an attitude of acceptance of the inevitable. Mr. Pan Fu suggested that the improvement of the canal in the Province of Chihli should be united with the Shantung plan.
In conversations with the officials concerned I had made it plain that it was our desire that they should act with perfect freedom from the point of view of their own best interests, in considering the proposals of the Corporation. The Premier, however, stated to me “what can we do, the Corporation has tied our hands.” * * *
The Japanese Legation is already showing signs of impatience and dissatisfaction with the slowness of the Chinese.
I believe to be acting in accordance with your desire in entirely dissociating this Legation from any pressure which may be sought to bring to bear upon the Chinese in this matter. But I apprehend that the policy upon which the American International Corporation has entered cannot in the long run be carried through without some browbeating of the Chinese; for good offices of this nature the Corporation will have to rely on others.
I have [etc.]