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

No. 542

Sir: With reference to the Department’s telegrams No. 259, October 2nd, 4:00 p.m., No. 325, of November 10th, 6:00 p.m., and to the Legation’s telegram No. 309, of October 10, 12:00 a.m. [noon], regarding the Siems-Carey Company and the American International Corporation, I have the honor to transmit herewith memoranda of interviews with Mr. T. C. Sun, of the Ministry of Communications, of October 9th35 and December 1st, 1920.

I have [etc.]

(For the Minister)
A. B. Ruddock
[Page 678]

Memorandum of a Conversation between Mr. T. C. Sun, of the Ministry of Communications, Mr. Torrance, of the Siems-Carey Railway and Canal Company, and Mr. Ruddock36

Mr. Ruddock communicated to Mr. Sun the substance of Department’s November 10th, 6 p.m., No. 325. Mr. Torrance informed Mr. Sun that the Siems-Carey Company, while believing that the Peking organization of the Company should be maintained, was prepared, contrary to its best judgment, to assent to the curtailment or discontinuance of that office should the Chinese Government so desire. On the other hand the Company was prepared to continue to advance funds to keep the office in operation and to maintain the current deficit. The Company was of the opinion that construction on the Railway should not begin until the survey had been completed, and that in view of existing conditions in China it was not an opportune time to send field parties into the country districts. Mr. Torrance alluded to two recent instances of murder of British subjects by bandits. Mr. Sun claimed that it was entirely feasible to send out field parties, that he did not anticipate that any military operations would take place, but that if they did they would not interfere in any manner with foreigners, particularly those engaged in railway survey work. Mr. Torrance expressed his willingness and desire to report to his Company the views expressed by Mr. Sun in this connection with a possible view to the advance by his company of funds to complete the survey, although he felt that his Company would desire some form of guaranty for the safety of the field parties. In reply Mr. Sun stated positively that the Chinese Government would afford protection but could not give guarantees: other foreigners and native engineers were engaged on the railways without asking such guarantees; if necessary no foreign engineer but only Chinese engineers could make up the personnel of the field parties. Mr. Sun repeatedly confirmed his view that no difficulties would be encountered by field parties.

Mr. Ruddock conveyed the statement contained in Department’s 325 that Mr. Carey had made no promise to begin work within a ten month period. Mr. Sun emphatically repudiated this statement and repeated what he had said on October 9th that Mr. Carey had declined to put such an engagement in writing as he said such written statement would be superfluous and that work would begin at once as soon as he could return to America and consult with Messrs. Stone and Wiggin. Mr. Sun expressed the fear that failure of this [Page 679] enterprise would seriously damage American prestige in China; that other nationalities, namely the French, Belgian and Dutch, were proceeding with their enterprises, notably the Lung-Hai Railway and the Pukow Port development schemes. As a matter of fact today ten million francs had just been transferred from Paris and forty million more were available for the latter scheme at a lower rate of interest, say five or six per cent. When it was pointed out that such advances could only be made at a loss by France Mr. Sun assented, stating that such advances were made under a previous contract and were carried out to maintain French good name in China. He expressed the view that American financiers were taking a too purely business point of view in the present instance, as equally large if not larger returns were immediately available in the American market, but called attention to the fact that investments in China, and particularly the carrying out of this contract, would eventually bring in large returns and very much enhance American influence.

Mr. Sun also referred to the fact that the French were about to undertake the construction of a line from Ching-Yu northwesterly into Yunnan. Mr. Sun stated that the Chinese knew well that the United States were in a better financial situation than either France, Belgium or Holland, and were hence unable to understand how these other countries were able to make more favorable financial terms with China than America.

Mr. Sun said that he would communicate the messages from Mr. Torrance and Mr. Ruddock to Yeh Kung Choh, Minister of Communications, and bring back his reply.37

  1. Not printed; see the Minister’s telegram no. 309, Oct. 10, p. 676.
  2. Albert B. Ruddock, Secretary of Legation at Peking.
  3. No further report on the subject has been found in Department files.