893.51 Contractual Obligations/33a: Telegram

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

205. Reference that portion of Department’s 192, June 29, 2 p.m., relating to reported settlement of outstanding financial obligations of the Chinese Government to Japanese interests.

Department assumes that Legation has already investigated and given thought to the situation thus presented, with particular reference to possible effects on claims of American creditors, and that when practicable a report will be submitted to the Department.

In view of the probability that, due to the limited amount of funds considered by the Chinese Government as available for the liquidation of its debts to foreign creditors, each successive settlement of Japanese claims lessens the chances of other creditors obtaining early favorable adjustments and particularly cash payments, Department is of the opinion that American claimants, with the active assistance of the Legation, should endeavor at this time to effect satisfactory settlements of their outstanding accounts with the Chinese Government and agencies thereof.