893.51/5713
J. P. Morgan &
Company, of New York, to the Secretary
of State
New
York, October 18, 1932.
[Received October
21.]
Sir: We enclose for the information and files
of the Department copy of a letter dated July 26, 1932 from the Chinese
Ministry of Railways,77
addressed to the British, French and American Groups signatory to the
original loan contract of 1911 (and received by us through the American
Group representative in Shanghai), requesting the issue of the second
series of £4,000,000 bonds contemplated by Article XV of such
contract.
We also enclose copies of letters and cables which have been exchanged by
us with the British and French Groups bearing upon this request of
China.78 The Department will observe that the position of the
American Group was set forth in our cable No. 2370 of October 6th to
Morgan Grenfell & Co., London, for the British Group.
We shall of course keep the Department informed of any developments in
this negotiation which come to our attention.
Respectfully,
J. P. Morgan & Co.
[Enclosure—Telegram]
J. P. Morgan &
Company, of New York, to Morgan
Grenfell & Company, of London
New
York, October 6, 1932—7
p.m.
32/2370. 2366.77 We
have noted with interest Sir
Charles Addis’ view that possibly something can be
worked out of the Hukuang situation.
[Page 625]
We recognize constructive nature of any such
development and would thoroughly approve it. However, under present
market conditions here it would be quite impossible for American
Group to make an issue and the American Group would, therefore, not
at present feel justified either in issuing or in accepting a
participation in an additional loan.
With this comment and upon the assumption that all the rights of
group members in future business are preserved, our group approve
the proposed draft cable with the French addendum.
We take the liberty of suggesting further that Sir Charles Addis may
want to make it clear that the arrears of £2,000,000 on the original
loan (mentioned in paragraph 6 of his letter of September 23rd to
Charles F.
Whigham79) could not be taken from the proceeds of any new
Hukuang loan, but such entire proceeds would have to be used for
additional construction.
