The American Delegation to the Secretary of State
[Received January 30—10:40 a.m.]
Conference 24. Legation’s 36, January 20, 8 p.m.54 Financial requirements of Chinese Government daily growing more desperate. Aglen55 declines to furnish them any security from existing customs for a loan. We have it on good authority that within the next 10 days the powers will be asked to permit two and one-half percent surtax provided by Washington Treaty56 to become effective immediately. Revenue derived therefrom to be immediately and unconditionally available to Central Government. At beginning of Conference all powers except Japan agreed to immediate putting into effect of the two and one-half percent provided by Washington Treaty, the revenue derived therefrom to be impounded and to be hereafter disposed of as agreed by the Conference in accordance with article 3, Washington Treaty. We do not believe powers will recede from that position and grant request of Central Government for unrestricted use of revenue. As above indicated, powers believe, first, that present administration has no influence in any province and that its life will be of very short duration; second, that granting its request would be regarded by provinces and other war lords as an effort, on the part of [Page 744] the powers, to perpetuate the existence of present Central Government and would preclude the possibility of obtaining cooperation of provinces and war lords in the support of any new treaty which we may evolve.