493.11/1851: Telegram
The Minister in China ( Johnson ) to the Secretary of State
[Received March 21—8:45 a.m.]
127. Legation’s 107, March 2, 4 p.m.3 A reply has now been received from Foreign Office pertinent part of which is as follows:
“The Chinese Government expresses its complete concurrence in principle in respect of settlement of debts but as circumstances are complicated and the matter is of very great importance it is necessary thoroughly to examine and discuss the matter. It has now been decided that the Ministries of Foreign Affairs, Finance, Communications and Railways shall each appoint responsible special delegates who will jointly discuss with the responsible United States delegates to be appointed by the American Legation a procedure for handling debts between the two countries.
Aside from waiting until the date and place for the conference have been fixed when I shall have the honor again to communicate with you, I have the honor Mr. Minister to indite this formal note for your information.”
On the day note was delivered Peck had occasion to call upon political Vice Minister of Foreign Affairs on another matter and took the [Page 548] opportunity to request precise meaning of what he considered the vague phraseology of the note.
Hsu Mo said that decision regarding joint discussion between special delegates was made by the Central Executive Committee of the Kuomintang. He intimated that the phrasing of the note may have been purposely worded in order to permit the investigation of various methods for the adjustment various debts but stated emphatically that it was most unlikely that the Chinese Government would ever consent to adopt any one method to be applied to all debts. He quibbled on the word “claims” saying he was doubtful whether the authorities of the Chinese Government had an accurate conception of the meaning of the word “claims” and that he had been unable to find a precise Chinese equivalent for this English term. In answer to Peck’s arguments in behalf of the Department’s proposal he said that a method of adjusting debts which had proved satisfactory for the United States in its international position was not feasible for China, situated in quite a different international position; that it would be extremely dangerous for China to consent to a course of action which would serve as a precedent for a demand by other nations that China proceed to an adjustment of debts.
The Chinese suggestion of discussions between delegates would appear to be a highly complicated and unsatisfactory method of evading the American proposal for the adjudication of claims by means of a commission. The Legation believes that Foreign Office should be told that its proposal is unsatisfactory as calculated unnecessarily to delay a definite solution of the matter; and that if the Ministry of Foreign Affairs desires to discuss the questions involved with the interested Ministries we believe it should do so without injecting those Ministries into the discussions between the Ministry of Foreign Affairs and the Legation.
Despatch follows.4