893.51/2289: Telegram

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

The Government desires to develop port of Hulutao and makes inquiry as follows: Will American financial group of the Chinchow-Aigun contract,1 which contains provisions for port development, furnish loan of $8,000,000 for this purpose? In default of such action the Government desires to be free to cancel the terms of the agreement and to approach other American financiers for a loan. I would consider it most unfortunate if this option should be abandoned as it is of primary political importance that Hulutao be developed by Chinese or neutral capital to obtain the last opportunity for the creation of a firm port in Manchuria free of Japanese control, therefore I venture to suggest that if the Chinchow-Aigun group itself does not wish to take advantage of this option probably [it could] delegate its rights thereunder to any other American group which the Chinese may designate.

It is understood that certain British interests are desirous of undertaking this work. Probably it might be arranged for these British interests to cooperate.