Foreign Relations of the United States Diplomatic Papers, 1935, The Far East, Volume III

893.48/1031

Oral Statement by the Chief of the Division of Far Eastern Affairs (Hornbeck) to the Chinese Ambassador (Sze) on December 27, 1935⁶⁸

Referring to the oral statement made by the Chinese Ambassador to Mr. Hornbeck on December 27,—

It is deemed necessary to point out that the American Government, in the discussions which have followed upon the presentation of the Chinese Embassy’s two notes of November 18, 1935, has not proposed any schedules; that the Chief of the Division of Far Eastern Affairs of the Department of State orally informed the Chinese Ambassador on December 19 that it might be possible to arrange for certain modifications of the existing agreements, along certain lines; but at the same time, he stated that the American Government sought an indication of a definite disposition on the part of the Chinese Government to take appropriate steps toward the liquidation of various of the outstanding obligations of the Chinese Government to American private creditors. As matters stand at present, there will be due to the Farm Credit Administration on December 31, 1935, the sum not of a quarter of a million dollars United States currency but of something over three million dollars United States currency.

It is not perceived that the statement that the Chinese Minister of Finance desires to have contact with some representative authorized to negotiate with reference to the Chicago Loan with a view to its settlement as soon as practicable affords any clear evidence of a definitely responsive attitude on the part of the Chinese Government to the suggestion conveyed in the conversation of December 19. Should a representative of the creditors be called upon to proceed to China; and if such a representative did so proceed, would there not be likely to ensue developments embarrassing to the Chinese Government?

[ Washington ,] December 27, 1935.

68. This amended statement was substituted for a substantially identical oral statement made to the Chinese Ambassador on December 27, with the exception of the last sentence, which read: “It may with warrant be queried: why should an additional burden thus be put upon the creditor; and are there not much more practicable and obvious methods by which evidence could be given of the Chinese Government’s good intention.”