The American Group to the Acting Secretary of State

Sir: Referring to your letter of June 11, 1919, (FE–893.77/1775), enclosing copy of Despatch from the American Minister at Peking relative to the terms upon which China is willing to relinquish to the other members of the Group the German rights under the Hukuang contract,94 we send you herewith for your information copy of a memorandum filed with the Ministry of Communications on May 7, 1919, by the Groups’ representatives in Peking.

Yours respectfully,

J. P. Morgan & Co.
For the American Group

Memorandum of the Representatives of the British, French, and American Groups to the Chinese Foreign Office 95

The Groups’ Representatives find themselves at a loss to comprehend the proposal of the Chinese Government that, in order to acquire the rights vacated by the exclusion of the Germans, the British, French and American Groups should reimburse to the Chinese Government the amount of £1,500,000. This amount has already been received by the Chinese Government from subscribers to the bonds issued in Germany and has been expended by the Government on the construction of the Railway.

In the opinion of the Groups’ Representatives the bonds and coupons of the German Issue remain a direct obligation of the Chinese Government.

The Groups’ Representatives however desire to point out that the question raised by the British, French and American Ministers in their communication of the 25th of March to the Wai Chiao Pu96 is not concerned with past operations but with future rights and [Page 587] interests in the Hukuang Railways in which, by reason of the war, co-operation with the Germans has become impossible.

They note from the letter of the Wai Chiao Pu dated 24th of April97 that the Chinese Government

“welcomes the statement that Great Britain, France and the United States will unite in using their best endeavours to see that sufficient funds are furnished to ensure the completion of the Hukuang Railway, provided it is distinctly understood that such co-operation is confined to Great Britain, France and the United States.”

The present proposal for the co-operation of a Chinese Group appears to the Groups’ Representatives to be in conflict with this declaration. They are of opinion that in any case the discussion, at the present moment, of the readjustment of interest necessitated by the exclusion of the Germans is premature, and that this question should be left in abeyance on the basis laid down in the Wai Chiao Pu letter of the 24th of April which has already been communicated to the three Governments concerned.

  1. Letter and enclosure referred to not printed; for Chinese terms see note No. 962 of Apr. 80 from the Chinese Acting Minister of Foreign Affairs to the American Minister, p. 582.
  2. Observations upon note of Apr. 30, p. 582.
  3. See despatch of Apr. 29 from Minister Reinsch, p. 579; also enclosure 1, p. 580.
  4. Ante, p. 581.