893.51/5092: Telegram

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

792. Cunningham3 writes me that Sokolsky4 is at present acting in some capacity as a liaison between Yada5 and Soong in regard to obtaining Japan’s [approval of?] the levying of the interim surtaxes. Sokolsky states that “there was no difficulty in reaching an agreement for the enforcement of the interim import duties as contained in the counterproposal of the British, Japanese, and Americans in 1926” but that in his opinion stumbling block is the question of arranging for the payment of the unsecured obligations, such as the Nishihara loans.6 Yada insists that the Minister of Finance should set apart some definite revenue, such as the customs surtaxes, for the service of those loans, while Soong, though personally not opposed to such a course, desires that the bondholders should get together [Page 534] and determine what revenue should be set aside for this purpose. The opinion was expressed that such an agreement would be easy to reach and would relieve Soong from the responsibility of [countersigning?] revenue for this purpose, an act which would unquestionably invite severe criticism.

  1. Edwin S. Cunningham, consul general at Shanghai.
  2. George E. Sokolsky, an American journalist in China.
  3. Shichitaro Yada, Japanese consul general at Shanghai.
  4. Loans by Japanese banking interests to the Chinese Government, 1917–1920.