893.77/1788
The Minister in China (Reinsch) to the Acting Secretary of
State
Peking, June 30,
1919.
[Received August
5.]
No. 2847
Sir: In continuation of my despatch No.
2695 of April 29th relating to the proposal to eliminate the German
interest from the Hukuang railway enterprise, I have the honor to
enclose copy of a note from the Foreign Office dated April 30th
which was written and received after the note of the Foreign Office
already communicated to you in which it accepts the proposal for
elimination of the German interest. That such a demand should be
made seemed to the Ministers concerned as somewhat extraordinary. It
was first considered appropriate to return the note to the Foreign
Office as the alternatives presented therein could not be
entertained. However, as the British Minister remarked that at the
time when he had received the assurance that our proposal to
eliminate the German interest would be accepted in a note, the
Acting Minister for Foreign Affairs had also stated that the Chinese
Government might make a counter proposal in this matter, we decided
to reply—merely stating that we should defer expressing ourselves
upon the counter proposals at this time. Copy of the note in this
sense to the Foreign Office, dated May 22nd, is also herewith
enclosed. Identical notes were sent by the three Ministers
concerned.
I have [etc.]
[Enclosure
1—Translation]
The Chinese Acting Minister of Foreign
Affairs (Ch’en
Lu) to the American
Minister (Reinsch)
[Peking,] April 30, 1919.
No. 962
Sir: This Ministry has already sent
Your Excellency a communication regarding the elimination of the
German interest in the Hukuang Railways. We are now in receipt
of a note from the Ministry of Communications saying that
certain declarations ought to be made; (1) The German share in
the bond issue of the Hukuang Railway System with the privileges
attached thereto has been cancelled by the Chinese Government
and such rights and privileges revert to the Chinese Government
which should enjoy the German share of the rights and
privileges. The responsibilities of the Germans in respect to
loans and construction work, as defined in the Loan Agreement,
should also be assumed by the Chinese Government, which may
transfer them to Chinese capitalists who will receive the same
treatment as the British, French and Americans. [Page 583] (2) If the British, French and
Americans wish to obtain the German rights which have reverted
to China, they must pay to China the £1,500,000 already advanced
by the Germans, after which they may inherit the rights and
attendant privileges attaching to the German loan. This Ministry
is requested to convey this declaration to the British, French
and American Ministers.
We now ask Your Excellency to choose one of the alternations [alternatives] proposed by the Ministry of
Communications. If the second is preferred, the German share
amounting to £1,500,000 with accrued interest has been
appropriated by the Chinese Government, as security against the
war indemnity of China. Therefore anyone wishing to obtain the
(German) rights and privileges should pay to the Chinese
Government the £1,500,000. We now send this notification and
await Your Excellency’s reply.
[Enclosure 2]
The American Minister (Reinsch) to the Chinese Acting Minister of Foreign
Affairs (Ch’en
Lu)
[Peking,] May 22, 1919.
No. 948
Excellency: I have the honor to
acknowledge the receipt of your note of April 30, containing the
two proposals of the Chinese Government for dealing with the
cancelled rights and privileges of the Germans in the Hukuang
Railway Loan. As to how the German rights are to be distributed
now that they are cancelled, the matter needs careful
consideration in view of the provisions of the Loan Contract. I
am not able at present to give a decisive reply as to the policy
to be adopted concerning the two proposals, which do not seem to
be very clear. I will defer expressing myself on the subject
until we can go into particulars more thoroughly after the
representatives of the different banks at Peking have received
instructions from their head offices.
I avail myself [etc.]
