893.51/5804: Telegram

The Acting Secretary of State to the Minister in China (Johnson)

297. Your 674, August 11, 3 p.m., and Department’s 294, August 19, 11 a.m.9

[Page 647]
The Department is prepared to authorize you to join with the British and French Ministers in repeating representations made in joint note of March 3, 1932, and joint memorandum of June 10, 1932,10 (see your despatch No. 1614, July 7, 193211) and insisting upon compliance by Chinese Government with its obligation under Article IX of the Hukuang Railway Agreement of 1911.12 However, the Department perceives no warrant for any reference in the proposed note to the cotton-wheat loan and the flood relief surtax, as it would seem that the provision in Article IX of the Hukuang Railway Agreement for substitution of security could not reasonably be held to have contemplated inclusion of such revenues as those derived from the flood relief customs surtax. Also, Department cannot accept the statement as proposed with regard to “priority”.
You should, therefore, affirm the Department’s complete willingness to participate in the sending of a memorandum signed by the three Ministers provided a text not containing irrelevant or disputable statements can be agreed upon. For your guidance, the Department suggests for consideration a statement approximately as follows:

“The representatives of France, Great Britain and the United States of America, referring to their joint note of March 3, 1932, and their joint memorandum of June 10, 1932, desire again to draw the attention of the Chinese Government to the fact that the bondholders of the Hukuang loan are entitled under Article IX of the agreement to have the service of that loan made a charge, as described and as provided in that Article, upon a portion of the customs revenue”.

For your own information, please note report of July 8, 1926, on Special Conference on the Chinese Customs Tariff,13 enclosure 201 consisting of a memorandum entitled “Tientsin-Pukow and Hukuang Loan Contracts”.14
  1. Latter not printed.
  2. See telegram No. 603, June 4, 1932, 9 a.m., from the Minister in China, and the Department’s reply, telegram No. 146, June 6, 1932, 6 p.m., Foreign Relations, 1932, vol. iv, pp. 618 and 619.
  3. Not printed.
  4. For text of final loan agreement, dated May 20, 1911, see John V. A. Mac-Murray, Treaties and Agreements With and Concerning China, 1894–1919 (New York, 1921), vol. i, p. 866.
  5. Foreign Relations, 1926, vol. i, p. 767.
  6. Enclosure not printed; cf. footnote 84, ibid.