File No. 893.811/275
[Untitled]
Peking , October 30, 1917, 4 p.m .
My telegram of October 27, 11 p.m. It is indispensable that International Corporation take into consideration the American public interest in the matter of the Grand Canal improvement resulting from the long connection of the American Red Cross and the United [Page 224] States Government with the project. At the present time emergency exists which makes immediate work on the project absolutely necessary in order to avert further calamity, as well as good business because swarms of laborers rendered destitute by the floods are available. It is the only method by which prevention and relief can be combined. Government and public are demanding action, relying on the American contract: American failure at this time would have the most disastrous consequences.
As to necessary work, immediate advance of 100,000 dollars would carry preparatory engineering work; when plan completed, further advance or bond issue of million dollars would sustain the enterprise until action of Parliament and would make possible completion of a portion independently useful.
Parliamentary consent is not requisite to the legal validity of a loan since the Government as at present constituted is internationally recognized as able to contract obligations. See instances reported in above telegram. Recommendation in my telegram of August 30, 6 p.m., was based on political undesirability of America at that time leading off with a loan made without Parliament. These conditions no longer apply as other international action has supervened. The safety of any advances made on the same securities or even the main loan under the canal contract made with the present Government cannot be questioned. Endeavor to secure [emergency?] commands to go ahead and I beg to request the Department to encourage the Corporation to do so in their own and public interest.
Carey reiterates recommendation to the International Corporation to make immediate advance of 100,000 dollars and adds to prepare for issue of million when construction plans prepared.