893.77/1734a: Telegram

The Acting Secretary of State to the Minister in China ( Reinsch )84

You will please take up immediately with the Chinese Government the question of eliminating by them all the German interest in the Hukuang railroad, and urge that it be done. You will also urge upon them the importance of holding for the time being in the Chinese Government the title to the interest to be cancelled, and until such time as the new Consortium can be formed. After that time it may be advisable from the point of view of China’s welfare, and to promote international comity and cooperation to reassign this interest to some other power or powers, or citizens of such, as may be associated in the new Consortium. Concurrently you may say that this Government will use its good offices with the other governments concerned, and with the American bankers to the end [Page 573] that China does not lack funds for the completion of this railroad. The traditional friendly interest of the United States for China is in itself an assurance that the welfare of China in this, as in other respects, will be the subject of the solicitous interest of this Government. The prospect of a very early completion of a treaty of peace makes this now an urgent matter, as it will be necessary to take advantage of the existence of a state of war to eliminate this German interest without complications. This Government looks upon the step here proposed as important and as particularly urgent, and you will please be guided accordingly in your representations to the Chinese Government.

For your information and for such use as you may deem advisable the prospect of an early completion of a new Consortium is very encouraging and the governments of the United States, England, France and Japan will probably be able in the comparatively near future to come to an understanding in regard to the fundamental principles, which will then be proposed to the Chinese Government, and which will insure to them a source of financial assistance on terms which we hope will be entirely agreeable and acceptable to China. In view of this fact it is all the more important that China cancel the interest granting to a hostile government, and to the citizens and subjects of that government certain rights and privileges the continuance of which is inimical to the welfare of China as it is viewed by the United States, and may be very embarrassing to the future operation in China by the powers now interested in the new Consortium group, and might even lead to complications and trouble in the future in China.

For your confidential information and guidance, and communication to Abbott.85 Mr. Morgan86 has just returned from England and France, where he consulted members of the British and French financial groups. From him and from advices which have come through official channels to the Department we now understand that the bankers of those countries desire an early acceptance by their respective governments of the general principles of the Consortium, and an agreement with this Government and Japan in regard thereto. Japanese officials suggested to Mr. Abbott in Tokyo that a meeting of the representatives of the various national groups be held in New York to discuss the details and working arrangements of the matter. Acting upon that suggestion we are today communicating with Tokyo expressing our approval of the suggestion and inviting them to send a representative of their financial group to meet the representatives [Page 574] of the other interested powers in the City of New York on May 15. If Tokyo accepts we will make the same suggestion to England and France.

Repeat to Tokyo for information only.

  1. See last paragraph for instruction to repeat to Tokyo.
  2. John Jay Abbott, representative of American banking group.
  3. Of J. P. Morgan & Co.