861.01/761: Telegram

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

78. My 76, March 12,11 a.m.

French Minister warned Minister for Foreign Affairs afternoon 12th against endangering French rights and interests of Russo-Asiatic Bank in respect of Chinese Eastern Railway by recognition of Soviet Russia for which, as he added, the liability might prove embarrassing to Chinese finances.
I am reliably informed that Japanese are opposing recognition not only in Peking but especially in Mukden. If the Peking and Moscow governments get together, the position of Chang Tso-lin who now practically controls the Chinese Eastern Railway would be seriously [apparent omission].
Raindre of Russo-Asiatic Bank, who was already much depressed by his Harbin experiences and especially by the discovery that Ostroumoff had given in [sic] his adherence to Soviet Russia and who is now greatly disturbed by the prospect of the elimination of the bank through Chinese recognition of Russia, intimated to me today that the French Minister would come to me with the draft of a joint note to the Chinese Government for the protection of the bank which Raindre hoped I would be able to sign along with Japanese Minister, though in view of British recognition of Russia it was not believed our British colleague could also join. I read in reply Washington [Page 482] resolution on the Chinese Eastern Railway9 and expressed the opinion that it did not warrant me in taking such a step and that I should have to consult my Government. I also had in mind Department’s instruction number 520, December 18th, 1923,10 which of course I did not allude to. Raindre argued that he was only asking our assistance for the protection of “foreign stockholders, bondholders and creditors of the Chinese Eastern Railway Company” as contemplated by the Washington resolution.
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