The Secretary of State to the Minister in China ( Schurman )
337. Departments October 31, 8 p.m.
You are instructed to again call the attention of the Chinese Government to the continuing default on the Chicago Continental Bank loan and insist that some immediate action be taken to remedy the [Page 386] present wholly unsatisfactory condition. Please call attention to the fact that since November 1st, the date on which default occurred, China has paid interest on subsequently maturing obligations and that fact has created further misunderstanding on the part of American investors holding China’s defaulted notes. You may suggest that if it is impossible for the Chinese Government to pay principal at this time, it would have beneficial effect upon Chinese credit if past due interest were paid pending arrangements to pay principal.