893.51/3903: Telegram

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

318. My 301, July 11, 1 p.m. Representative of Pacific Development Corporation has requested me informally call attention Chinese Government to the fact they are permitting to slip by an apparent opportunity to liquidate Pacific Development Corporation obligation and urge them reopen negotiations. I have declined on the ground among others that Crisp loan would be in opposition to consortium hence presumably against policy of the United States. Representative then asked if he might make such a suggestion himself to the Chinese. I told him he would thereby run the risk of denial to Pacific Development Corporation of future assistance by American Government with Chinese. He now addresses me a letter pointing out difficult position of corporation in view of this attitude and the unfairness of this position. He states that corporation and Legation have done everything to get Chinese Government to pay up loan. Corporation has tried to persuade Morgan and the group to take loan on any reasonable terms but was refused. Now if corporation cannot take advantage of Crisp negotiations it leaves corporation carrying what is for it tremendous loan and to extend benefit of principles of consortium which has itself refused corporation assistance group would thus refuse to help corporation and refuse to permit anyone else to do so. Please instruct.