893.77/1848: Telegram

The Minister in China (Crane) to the Secretary of State

309. Your 259, October 2, 4 p.m. I have conveyed contents orally to T. C. Sun of Ministry of Communication and managing director of Chu [chow]-Chin[chow] Railway for presentation to the Minister of Communication. He expresses the view that Chinese Government would be quite justified in cancellation of the contract. He states that the Ministry is seriously disappointed at lapse of four years with no accomplishment, especially in view of oral promise given by Carey, December 1919, that beginning would be made within ten months. The Ministry of Communication would prefer not to cancel contract but, because of heavy unproductive capital charges on advances and maintenance of organization totaling about $150,000 annually, is compelled seriously to consider cancellation or at least abolition of office organization costing $6,000 monthly. The Minister categorically insists upon announcement of definite date [of] resumption of operations leading to early construction. Famine makes immediate resumption extremely desirable. The Ministry considers present political conditions will prove no obstacle, instancing Changsha-Wuchang line.

New Minister of Communication being criticised for ultrafavorable terms present contract and moreover determined effect actual construction if only on small scale. He expressed deep personal disappointment at lack of real accomplishment by Americans in Chinese field and the fear that failure of present opportunity would make future American success very difficult. He pointed out the fact that Belgium with Dutch money on easy terms was carrying out provisions for construction of Lung-Hai Railway. He quite personally expressed the hope that even comparatively small advances, say two or three million, be made available annually by Siems-Carey to keep the work going in some measure until money markets and other conditions might become easier. This, he thought, would satisfy Yeh34 and tide over the present crisis.

Siems-Carey representative cognizant of situation.

  1. Yeh Kung-ch’o, Chinese Minister of Communications.