Memorandum by the Chief of the Division of Far Eastern Affairs, Department of State (MacMurray)

Memorandum of conversation with Mr. Saburi, Secretary of Japanese Embassy, regarding financial condition of Chinese Eastern Railway, February 18th, 1921.

By direction of Ambassador Morris, I requested Mr. Saburi to call on me at three o’clock. I told him that we were feeling somewhat anxious in regard to the financial status of the Chinese Eastern Railway, inasmuch as the road, operating under abnormal conditions and further disabled by the slump in Manchurian products, was badly handicapped by the failure to receive payment of the large transportation bills incurred for the Czecho-Slovak, Polish and French troops,—and now still further handicapped by the refusal of the Japanese to pay for their troops, on the ground that the French were withholding payment of their accounts. I said that the Japanese Government would doubtless be as concerned as we, if the withholding of these payments were to precipitate a new situation that would upset the present system of inter-allied control which had in fact been worked out between the Japanese Foreign Office and our Embassy in Tokyo; and that we took it for granted that the Japanese would not desire to upset the cooperation we had established, solely for the reason that certain third parties had failed to cooperate for their part.

[Page 569]

I then remarked that the financial situation carried with it a danger of unfortunate political complications;—that various factions in Russia were contending for control of the railway, that the Chinese Government was seeking to extend its powers over the line, and that a further complicating influence was the effort of Chang Tso-lin to consolidate his position throughout Manchuria and over the railway. I said that to allow the railway to go bankrupt would amount to throwing it like a penny to be scrambled for, and that none of us could foresee what might result from such a scramble. I incidentally remarked that we hoped the Japanese would be able to exercise a restraining influence upon General Chang in this matter, which would doubtless be the more effective inasmuch as it was known that they had concluded with him some sort of an agreement in December last.

Mr. Saburi said he understood there were two questions,—the general question of maintaining the present inter-allied cooperation in controlling the railway, and the more concrete question of settlement of accounts. I said that the two questions were to our mind simply phases of the same matter—that we regarded the financial adjustments as a necessary condition precedent to effective maintenance of the present control. I added that I was mentioning this matter to Mr. Saburi because we were taking up the whole question with the British and French Governments, and felt that it was due in fairness to the Japanese, who were our original partners in the plan of railway control, to keep them frankly advised of the action we were taking with the other partners. He asked whether we had taken up diplomatically with the Japanese Foreign Office, as we were doing with the British and French Foreign Offices, the matter of delays in payment for transportation. I said that we were not doing so, as in the case of the Japanese it was merely a matter of urging prompt settlement of an account, whereas in the case of the British and French it was a matter of negotiations concerning the obligations assumed with respect to the Czecho-Slovak and Polish contingents in Siberia.

Mr. Saburi asked for a statement of the amounts due for transport tation of the several forces, as well as the amounts hitherto paid to the railroad by this Government. I called in Mr. Jameson,80 who from memory stated in round terms the several amounts. I then arranged with Mr. Saburi to forward him a statement of the precise figures: and later in the afternoon I mailed to him without covering letter of any sort a copy of the attached memorandum prepared by Mr. Jameson.

[Page 570]

Statement of Amounts Due the Chinese Eastern Railway for the Transportation of the Troops of Various Nations and Amounts Already Paid by the United States Government

1. Amounts owed now for transportation of troops of the following nations over the Chinese Eastern Railway.

Japan Yen 1,600,000.  
France $425,546.99
Czecho-Slovakia 3,416,011.53
Poland 87,717.19
Serbia 20,117.29
Roumania 86,537.90
Latvia 13,492.47
United States 66,176.50

2. Total Amount Already Paid by the United States for transportation of its troops over the Chinese Eastern Railway $567,858.68
Amount Still Owed 66,176.50
U.S Total Transportation bill $634,035.18
3. Amount allotted by the United States to the Chinese Eastern and Siberian Railways $5,000,000.00
4. Amount Contributed to the Committee $4,124,056.93

  1. J. Paul Jameson, consul, temporarily detailed to the Department.