File No. 893.51/2079
The Minister in China ( Reinsch) to the Secretary of State
Referring to my cable of November 18, 5 p.m.1 I have the honor to ask information whether negotiations for American participation [Page 198] in Chinese finances are entirely completed and whether a representative is being sent to participate in negotiations here and to study the situation. I must recommend urgently that this may be no longer delayed. Unless special attention can now be given to the Chinese situation far greater dangers will develop than that which has been overcome in Europe.
While the transfer of reorganization loan funds must await complete reconciliation [?], yet now is the time to work out a policy. Without a definite policy based upon first-hand knowledge of the essential facts no beneficial effects can be expected. Moreover, participation of an American representative in the preliminary currency reform loan negotiations is indispensable to protect American interests.
The situation here is as follows: The President is thoroughly devoted to a policy of peace and civilian representative Government, but considering the debauched condition of the Government clue to military rivalries, incompetence and Japanese hostility, the President needs positive support. Assurances of financial support after reunion will probably be given by the four representatives within a few days, but this should be immediately followed by laying the foundation of a sound constructive system, otherwise the President’s policy, opposed by military extremists in the north and radical extremists in the south, will be left hanging in the air. …
The President has given me private assurance that in connection with reorganization loan he will accept international auditing control of sources of revenue and application of funds. He desires a real disbandment of troops and in order that … the military police and reduced army be made efficient and protective to the people he is willing to place the matter in the hands of a military commission composed of [Chinese?] and foreign members. …
Funds are necessary for paying off troops and for all necessary colonization and public works to give them employment thereafter. …
I have the honor to ask full information as to the policy of the American Government and action immediately proposed.
- Not printed.↩