493.11/1410: Telegram

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

871. Legation’s October 15, 7 p.m.

In reply to the Legation’s note of October 19th (text quoted in my 772, October 15, 7 p.m.) I have now received from the Foreign Office a note dated December 4th quoting the Ministry of Finance as follows:

“We have the honor to state that the customs revenues have hitherto been designated for the payment of the Boxer indemnities of the various nations, as well as those foreign loans that have been [Page 537] actually secured. Your statement that these funds are the only source from which the American loans and other claims may be paid has been found upon investigation to be without foundation. The American loans to, and other claims on, the former Peking Government have already been listed by the former Ministry of Finance for adjusting as unsecured foreign loans, and have absolutely no connection with the remission of the German Boxer Indemnity.

This Ministry will wait until the above-mentioned unsecured foreign loans have been given collective consideration, and will then stipulate a procedure by which they may be handled individually.”

Reports have formerly been current that in the Sino-Japanese negotiations with regard to the tariff it has been agreed that the Chinese Government will recognize the Nishihara loans and provide for their liquidation beginning in 1929 on the basis of five million annually to be increased at the rate of one million each year thereafter. T. V. Soong is also quoted in press reports as stating that the unsecured debts of other nationalities will have to receive consideration similar to that accorded to the Japanese. Although I am unable to vouch for the authenticity of the foregoing reports, it would seem very likely that some arrangement of this character may be reached in the course of negotiations with Japan.

In order to protect fully our position I feel that some more specific statement of our attitude of the general tenor suggested in my telegram 818, November 8, 1 [7] p.m., should be addressed to the Nationalist Government at this time. I therefore hope that the Department may now be able to inform me as indicated in the Department’s telegram 385, November 15, 6 p.m.

  1. Telegram in three sections.