Papers Relating to the Foreign Relations of the United States, With the Address of the President to Congress December 4, 1917

File No. 893.811/269

The American International Corporation to the Secretary of State

New York, September 10, 1917.

Sir: In the paraphrase, which the Department was good enough to send the American International Corporation, of a message from the American Minister at Peking, dated August 30, 1917, concerning the contract negotiated between the Chinese Government and the American International Corporation for the improvement of the Grand Canal in China, the Minister states it is advisable immediately to sign the contract, pointing out that otherwise American interests will be seriously damaged. By other statements in his message the Minister permits the inference that the Chinese would view with regret the Corporation’s withdrawal from this enterprise, and he asserts that the Japanese would take it over entirely in such an event.

The Corporation desires that the Department should be fully informed as to all of its actions in connection with the Canal contract and wishes to conform with the policy of the United States Government as expressed by the Department. In spite of the fact, therefore, that under present conditions the intrinsic attraction of the enterprise is not great, the Corporation is prepared to conclude the contract, assuming that its action will be in complete accord with the policy of the American Government and of the Department of State.

The Department has been informed with regard to Japanese cooperation under the contract, and that such cooperation was conditioned upon the absolute requirement of prior consent thereto by the Chinese Government. The Corporation’s representatives in China have reported that this consent has been given, and Doctor Reinsch’s message substantiates their report. They also concur in Doctor Reinsch’s recommendation that the contract be executed because of its effect on American interests and prestige in the Far East.

In the belief, therefore, that its proposed action in signing and executing the Grand Canal contract with the Chinese Government is in full accord with the policy of the American Government and the Department of State, I have the honor to request on behalf of the American International Corporation that you will send the attached telegrams providing for the signing of the Canal contract to the American Legation at Peking for transmission to their respective destinations.

I have [etc.]

Charles A. Stone

[Inclosure 1—Telegram]

The American International Corporation to Minister Reinsch

New York, September 10, 1917.

Please furnish Carey copy following which you are requested formally to deliver directly to Director National Conservancy Bureau:

The American International Corporation has the honor to advise your excellency that it is today telegraphing Mr. W. F. Carey authorizing him on behalf of the American International Corporation and subject to parliamentary approval, to sign, but without any change whatsoever, the contract which has been negotiated and agreed to between the Republic of China and the American International Corporation for the improvement of the Grand Canal in China and which the parties have mutually marked for identification as D-16-517.

In view of the urgent desire of the Republic of China to provide by this contract for the improvement of the Grand Canal this telegraphic authority, which is hereby confirmed, has been given to avoid the inevitable delay incident to the transmission of formal written powers and this telegraphic power is to be understood as being full and complete and in lieu of such written powers.

Charles A. Stone,
President, American International Corporation

[Inclosure 2—Telegram]

The American International Corporation to Mr. Carey

New York, September 10, 1917.

Your 53 and 58. Obtain letter from Ministry of Finance stating entire amount annually required from stamp duty for domestic loan is 500,000 Mexican dollars, and that our Canal loan constitutes first lien on all stamp duties in excess of such sum. You are hereby empowered then to execute simultaneously with Chinese Government Canal contract, subject approval by legally constituted Parliament. Execution and consent to Japanese participation must be formally certified to American Legation by Chinese Government. Inform Japanese we are convinced parliamentary sanction essential validity contract. When contract concluded, execute for American International Corporation Ono endorsement.

Stone