File No. 893.00/2898

The Minister in China ( Reinsch ) to the Secretary of State

[Telegram]

My telegram October 26, 5 p.m. The President is greatly encouraged by favorable reception of his peace proposal in most quarters. His chief difficulty lies in finding financial means to take measures necessary to put the country on a peace footing and meanwhile to carry on the Government, aside from the sources which have supplied the military clique in the past. Before issuing mandates for absolute cessation of hostilities he must feel assured of financial support for expense of disbandment of troops and general expenses until reorganization of the Government is effected and normal revenues are again completely available.

He therefore asks whether, if he should take decisive action for peace, he may count on immediate financial backing of the Government’s authority, at least to the extent that negotiations for a short-time loan will be immediately taken up, affording the means for reconstruction of public credit and finance on a firm basis. …

I have the honor to recommend as the most important part [of] a friendly assistance to China towards a peaceful settlement, an announcement of policy to give support to the reunited Chinese Government for definite reconstruction purposes approved by the friendly powers taking such action and with an adequate control of the proper application of such funds.

Reinsch