893.515/490: Telegram

The Counselor of Legation in China (Peck) to the Secretary of State

58. 1. Following is summary of my despatch dated March 27 to the Legation:

In press despatch dated Peiping March 5 British Minister is quoted as stating inter alia that project for joint international credit to China is not effort to prevent friendly understanding between Japan and China and that such understanding essential condition of a loan. American newspaper representative informs me that Suma78 on March 27 commenting on the statement remarked that the present so-called friendly understanding could not survive the present strain and that Japanese military party is just waiting for some excuse to substitute stern measures toward China for the present friendly policy. Suma said that popular sentiment in China is still strongly anti-Japanese and he predicted that the Minister of Finance would not feel in position to give British Minister concrete proposals for international assistance in accordance with reported expectations of the British Minister.

2. I called on the Minister of Finance March 27, noon, on routine business and was impressed by the fact that contrary to his practice of late he mentioned neither the American silver purchases nor desire for international financial assistance. He spoke at some length and hopefully of his published purpose to issue 100,000,000 Chinese dollars worth of bonds to be handed to Central Bank and Banks of China and of Communication. He said he had issued no new bonds for over 1 year and had retired $10,000,000 of bonds monthly so that new bonds [Page 566] would merely replace retired bonds. He thought this Chinese loan if made would relieve money tightness in Shanghai.

3. If as I infer the interest of the Chinese Government in the project by such international financial assistance is growing less it may be because of published and private information that the Japanese Government will not participate in such joint action. Sent to Legation and Department.

  1. Yakichiro Suma, Japanese First Secretary of Legation in China at Nanking.