893.51/5887
The Minister in China ( Johnson ) to the Secretary of State
[Received May 19.]
Sir: I have the honor to enclose a copy of the Nanking Counselor of Legation’s despatch to the Legation No. 290–Diplomatic, April 23, 1934,7 reporting a conversation with Mr. Suma, Secretary of the Japanese Legation, upon the subject of China’s foreign debts.
Mr. Suma is reported to have made one most interesting statement to the effect that “the Japanese Government had found that when individual creditors made arrangements with the debtor railways, the endeavor of the railways was always to play one creditor off against another, resulting in great losses to the Japanese creditors. On this account, the Japanese Government had absolutely forbidden Japanese creditors to make individual arrangements with Chinese railways”.
It occurs to the Legation that the Japanese Government, in forbidding its individual creditors to make individual arrangements, may not be motivated so much by solicitude for the interests of the creditors as by a desire to retain these unliquidated obligations in a form which will lend itself more readily to use as diplomatic pressure.
Respectfully yours,
Counselor of Legation
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