The Secretary of State to the Minister in China (Schurman)
193. Your 322, July 27, 6 p.m.83
The Department is in sympathy with the proposal for postponement of Boxer indemnity payments. However, you will understand that, since this Government holds China’s bond for payment of the indemnity, nothing should be said to Chinese Government which might carry implication that the Executive undertakes to exercise, in the absence of legislative action, authority to enter into an agreement with China altering terms of that bond as to periodical payments of interest and principal. Doubtless no question on that point will be raised. You should therefore state that, if China is unable to meet payments at this time, the Department will refrain from pressing for payment for a period not extending beyond September 30, 1924, provided other interested governments are willing to defer payments. While the Government of the United States desires in no way to control the expenditure of these funds or monies obtained by loan secured thereon, you should consult with those of your colleagues taking similar action as to the advisability of obtaining from the Chinese Government a specification of the items to which these and other funds accruing to the Chinese Government for the period of postponement are to be used, particularly in view of Dr. Yen’s statement quoted in paragraph 1 of Section 2 of your number 322.