893.51/2353: Telegram

The Secretary of State to the Chargé in China (Tenney)

With reference to your despatch 2881, July 7, 1919, was proposed note of June 26, 1919, sent to Chinese Foreign Office?1 In this connection it is suggested that you take advantage of a favorable opportunity informally to impress upon the Chinese Government the effect which its proposed action will doubtless have upon its credit in foreign markets communicating to it the following which is the substance of a letter from the American Group expressing views with which the Department is in accord.

The American Group states that having received no notification that the Chinese Government has receded from its position it has had no recourse but to refuse payment on all coupons of the German issue which do not fall within the excepted class, but has indicated that such refusal was rendered necessary by reason of a situation which is subject of negotiation and may be changed. The American Group states that it has refrained from formally notifying the New York Stock Exchange of the attitude of the Chinese Government in view of the undoubtedly harmful effect such attitude will have upon any future issue of Chinese securities in this market. The Group believes that a strong protest should be made against the injustice of China’s position and its effect on her credit in view of her present wish to place a substantial loan in America.

  1. No communication answering this question has been found in the Department files.