893.51/2595
The French Ambassador (Jusserand) to the Secretary of State
Mr. Secretary of State: It appears from reports that have reached my Government that American bankers have taken up the matter of a 30 million loan to China that had been dropped by the Abbott group. It is said that the revenues derived from alcohol and tobacco would be taken as security for the loan and that a reorganization thereof would be entrusted to an international department under American management. It is even said that the contract may have already been signed.
My Government wishes me to remind Your Excellency of our views on the subject which may be summed up as follows:
- 1.
- As the American Government undoubtedly knows, we wish, on account of the international interest that attaches to the arrangement, that the advances and loans to China be in the exclusive charge of the institutions in the Consortium partnership.
- 2.
- The influence possessed in Peking by the United States Government should, we believe, make it easy for the American Minister to China to induce the Chinese Government to ignore offers from institutions that do not belong to the Consortium.
- 3.
- It cannot be denied that the taxes on alcohol and tobacco constitute, in any event, the first mortgage of the loan floated in 1913 [1914?] by the Industrial Bank.62 It therefore seems to us that our countrymen have a right to ask when the internal revenue service is reorganized to have a part commensurate to their interests and, in particular, the administrative direction of the service, assigned to them.
The Minister of Foreign Affairs of the Republic realized, as fully as Your Excellency, the advantages of an active Franco American [Page 552] collaboration in the Far East. He therefore believes it would be beneficial, in the process of reorganization, to assign to American specialists the technical management, mainly because of the experience gained by the American Tobacco Company’s representative in China.
In my Government’s opinion the above suggested arrangement would be practical and equitable, as taking into consideration the various interests involved. From a practical standpoint the American Government will doubtless take the position that the prohibition law recently enacted in the United States would make it preferable to entrust a Frenchman rather than an American with the executive collection of taxes on two staples, one of which is alcohol.
Be pleased [etc.]