893.51/2943: Telegram
The Chargé in Great Britain (Wright) to the Secretary of State
[Received 5:08 p.m.]
1320. Your 686, June 29, 5 p.m.18 and my 1299, August 27, 2 p.m.19 In note just received Foreign Office expresses uncertainty as to whether it is intended to suggest that the protest be extended to all bonds of these German issues irrespective of their ownership since the date of China’s entry into the war. Under article 297 of the peace treaty the Allied and Associated Powers reserve the important charges upon German assets and British Government would not feel justified in pressing Chinese Government to adopt a course at variance with the guiding principles followed [by] the other powers including British and recognized as authoritative in the peace treaty, a course which moreover would evidently be repugnant to feelings of Chinese Government. Apart from question of principle such action might prejudice the reception of the reconstituted consortium in China at the outset.
British Government is nevertheless anxious to cooperate with the United States Government and would willingly join with it and [Page 658] other Governments concerned, in pressing Chinese to adopt the practice which would obtain in Great Britain in similar circumstances of accepting as sufficient evidence of non-enemy interest a declaration to that effect indorsed by an approved bank or financial house in the form customarily required as regards securities issued [by] any Allied Government proposing to exercise its rights under article 297. British Government feel strongly that it is incumbent upon the Chinese Government to recognize validity of coupons of bonds whether of German issues or not, which can be shown to have been acquired without prejudice to the onus probandi of the treaty and at a date and in a manner which would make it impossible for enemies or ex-enemies to have derived any benefit from the transaction during the war.
On May 27th last, Chinese Minister in London informed Foreign Office that his Government only intended to limit restrictions as to payment to that portion of the German issue of Chinese loans which have been or are being held by Germans or other ex-enemy aliens. This statement appears to show that Chinese Government are ready at least to concede the justice of the contention expressed in the foregoing paragraph. The means of insuring that practical effect be given to this intention are yet to be found available which it is suggested will be done if the Chinese Government will agree to accept as sufficient evidence of non-enemy or ex-enemy interest a declaration of the kind mentioned above.
On learning of concurrence of the United States Government, Foreign Office will instruct British Chargé d’Affaires, Peking, to consult with American Minister and act accordingly. Paris informed.