493.11/1381: Telegram

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

772. Department’s 343, October 9, 6 p.m. In view of the potential influence of radical elements which are disposed to insist upon repudiation of China’s obligations, I feel it might play into their hands and indefinitely postpone settlement to address to Nationalist Government at this time a protest along the lines of memorandum enclosed with my despatch of March 25, 1928 [1926]. Subject to the [Page 533] Department’s approval, it seems to me preferable to confine myself in a note sent to the Minister for Foreign Affairs, independently of any action by my colleagues, to a general reservation of American rights and the assertion of continuity of governmental responsibility substantially as follows:

“I have the honor to acquaint Your Excellency that it is my understanding that the Nationalist Government intends to issue a short-term loan secured upon that portion of the customs revenues formerly required for the service of the German Boxer Indemnity.

“Inasmuch as customs collections are the sole source of revenue actually available for the satisfaction of a number of American debts and other liquidated claims now in default, I am instructed by my Government to recall the fact that there exists on the part of the Chinese authorities a continuing obligation to ensure the payment of the sums due to American creditors; and I have accordingly to make full reservation of their rights.”