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

No. 3484

Sir: I have the honor to refer to the Legation’s despatch No. 3032 of October 12, 1934,16 in regard to the proposed Sino-American claims commission, and in that connection to forward herewith copy of despatch No. 660 of March 19, 1935, from the Counselor of Legation, Nanking,14 in regard to a conversation which he had on this subject with Mr. T. K. Tseng, Secretary-General of the Commission for Readjustment of Domestic and Foreign Loans.

It will be observed that Mr. Tseng stated that, so far as he was aware, the Government had as yet devised no method for dealing with its foreign obligations in general, and that General Chiang Kai-shek had expressed in November, 1934, great displeasure that no progress had been made in this direction. Mr. Peck points out that Mr. Tseng, being a partisan of Mr. T. V. Soong,17 is consequently not unwilling that the United States should be encouraged to press for attention to American claims, thus causing embarrassment to the present Minister of Finance.

I also enclose copy of a memorandum of conversation between a Second Secretary of the British Legation and a member of my staff, together with the relevant extract of a memorandum handed by the British Counselor of Legation to the Foreign Office on March 11, 1935,18 regarding the outstanding non-contractual claims of British [Page 754] subjects against the Chinese Government. As this memorandum indicates, the recent action of the British Legation in presenting to the Foreign Office a memorandum similar to that presented by this Legation on June 19, 1934, has met with little success. Dr. Hsu Mo, the Vice Minister for Foreign Affairs, to whom the memorandum was presented, pointed out that the present was scarcely an opportune time, in view of the difficult financial situation in which the Chinese Government found itself, to present such a memorandum. The Counselor pointed out that while this was appreciated His Majesty’s Government was desirous at least of having the claims assessed. It would appear, however, that this desire will not be fulfilled, and I gather that the British Legation is not at all sanguine as to the possibility of any progress being made as a result of their recent action.

As of possible interest to the Department I also enclose copy of a memorandum of a conversation between a Second Secretary of the British Legation and a member of my staff, dated February 27, 1935,21 which gives some of the background of the presentation of the British Legation’s memorandum.

Respectfully yours,

Nelson Trusler Johnson
  1. Not printed; for enclosure to despatch, see Foreign Relations, 1934, vol. iii, p. 558.
  2. Not printed.
  3. Former Chinese Minister of Finance; executive member, National Economic Council.
  4. Neither printed.
  5. Not printed.