Papers relating to the foreign relations of the United States, 1928, Volume II

693.003/853

The Chargé in China (Perkins) to the Secretary of State

[Extract]

Peking, August 15, 1928.
[Received October 1.]

No. 1614

Sir:

. . . . . . . . . . . . . .

In connection with the first paragraph of the enclosed memorandum, in which is mentioned the plan of Mr. T. V. Soong to float a domestic loan of some forty million dollars to be secured on the proceeds of the cancelled German indemnity, I have the honor to refer to the Legation’s despatch No. 509, of March 25, 1926,⁹⁹ referring to two separate protests that had been filed with the Chinese authorities by the diplomatic representatives concerned¹ against the allocation, for fresh domestic loans, of that portion of the customs revenues formerly required for the services of the German Boxer Indemnity, and of recent years earmarked for the service of one of the earlier internal loans. In view of this action and the attitude which we have consistently taken toward the allocation of such funds to new obligations of the Chinese Government, I have the honor to recommend that I be authorized to make a further protest in the event the proposed loan is decided upon by the Nationalist Government. It would seem that a failure to protest in these circumstances might have a serious bearing upon the whole question of the assumption by the Nationalist Government of China’s existing financial obligations. It is requested that a telegraphic instruction be sent with regard to the Department’s wishes in the matter.

I have [etc.]

Mahlon F. Perkins

[Enclosure—Extract]

Memorandum by the Chargé in China (Perkins) of a Conversation With the Officiating Inspector General of Customs in China (Edwardes)

Mr. Edwardes took up the discussion of financial plans which he understands Mr. T. V. Soong, Nationalist Minister of Finance, has in mind for the near future. Mr. Edwardes said that, in the first place, it is planned to float a domestic loan of some $40,000,000, to be secured on the proceeds of the cancelled German Boxer Indemnity; that a sufficient amount of money was actually available from the Indemnity for this purpose; and that the Chinese bankers in Shanghai had this scheme well worked out. The funds obtained from this loan were to be used for the disbandment of troops and for looking after their employment in various kinds of public works.

With regard to the domestic loans now secured on the Customs, Mr. Edwardes said that it was planned to take the administration of the service of these loans out of the hands of the Inspector-General and to place it with a special board of Chinese bankers. The Inspector-General would, however, be one of the members of this board. Mr. Edwardes seemed to think that this was a good idea and apparently was not at all averse to being relieved from the sole responsibility of supervising the service of these loans.

. . . . . . . . . . . . . .

[Peking,] August 13, 1928.

99. Not printed.
1. For the protests of Mar. 18, 1926, and Apr. 19, 1926, see Foreign Relations, 1926, vol. i, pp. 947 and 948.