893.77/3211: Telegram

The Counselor of Embassy in China (Lockhart) to the Secretary of State

193. 1. The North China Transportation Company, a subsidiary of the North China Development Company, was formally inaugurated April 17. The new company will take over the work of the South Manchuria Railway in the administration of railways and other means of transportation and communication in North China (including motor car services, waterway transportation, and allied enterprises) as well as in Meng Chiang.46a A recent article in the vernacular press stated that the capital of the new company would be 300 million dollars of which 150 million would come from the North China Development Company, 120 million from the South Manchuria Railway, and 30 million from the Provisional Government.

2. The importance of the new company cannot be overestimated as it will consolidate under one management, primarily Japanese, the transportation facilities in North China and Meng Chiang. Of additional importance will be the attitude of the company towards the debts of the various railways to American concerns. The bylaws of the company, which are now being translated, will be forwarded in next pouch.

Repeated to Chungking. Text by air mail to Tokyo.

  1. Inner Mongolian provinces of Ghabar, Suiyuan, and Ninghsia.