The Minister in China ( Crane ) to the Secretary of State
[Received March 29—10:13 a.m.]
133. Legation’s 15, January 9, noon. It is necessary for protection of American interests that Legation be advised definitely consortium scope especially loans to existing railways.
British are insisting that agency provisions in existing loans rigidly apply and are awarding business to British first without considering American bids.
They are also preparing to make additional loans which in principle and practice will perpetuate existing agencies indefinitely.[Page 362]
Advise if loans to existing railways come in scope of consortium when issued following purposes and if so what is minimum amount and if issued securities can be sold by public flotation: (1) Betterments, example, Yellow River bridge, necessary loan in excess of gold dollars five million; (2) for certain property additions, example, Peking–Mukden double track loan in excess of gold dollars two million; (3) additional equipment, example, Peking–Suiyuan loan in excess of gold dollars three million; (4) extension, example, Peking–Suiyuan loan in excess of gold dollars three million.
Unless such loans are restricted to conform to the spirit and letter of the consortium agreement they can be made to extend present control of railways indefinitely.
Japanese are offering loans for Peking–Hankow Yellow River bridge which unless restricted will involve control of these lines.