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

No. 3788

Sir: I have the honor to refer to the Department’s instruction No. 1721, of July 26, 1935, with regard to the Hukuang Railways Loan of 1911, in the penultimate paragraph of which reference was made to the alleged statement of General Chiang Kai-shek to Mr. Cameron Forbes to the effect that it was his intention “shortly to appoint a foreign executive committee to run the railroads of China”.

As of possible interest in this connection there is enclosed a clipping from the Peiping Chronicle of September 11, 1935,43 in regard to the return to England of General F. D. Hammond, a British Railway expert who has been in China since May of this year at the invitation of the Chinese Government for the alleged purpose of making a general survey of Chinese railways. Bearing in mind the Department’s instruction mentioned above, a member of the Legation staff recently attempted to ascertain in a conversation with the Commercial Secretary of the British Embassy whether there was any connection between General Hammond’s visit to China and General Chiang’s proposal to create a foreign executive committee “to run the railroads of [Page 765] China.” There is enclosed a copy of a memorandum of this conversation,44 from which it will be observed that the British Commercial Secretary gave the impression that the British Embassy was not cognizant of General Chiang’s proposal as mentioned to Mr. Forbes and, moreover, that its information in regard to General Hammond’s visit was somewhat vague. According to the British Commercial Secretary, General Hammond has made numerous railway investigations of a character similar to that which he undertook at the request of the Chinese authorities, a fact which was indicated in despatch No. 10,042 of May 7, 1935, addressed to the Department by the Consul General at Shanghai.44 Therefore, while there may be some relationship between General Hammond’s work in China and the proposed plan of General Chiang, it is probable that this relationship exists only in the mind of the Generalissimo and that the British Embassy has no knowledge thereof.

Although foreign railway experts have in the past frequently recommended that a foreign committee be appointed to run the railways of China, the first intimation which the Legation received to the effect that General Chiang was seriously considering such a plan was contained in the Department’s instruction under reference. The Legation, however, will continue to follow the subject and endeavor to obtain more conclusive information in regard to this matter.

Respectfully yours,

For the Minister:
Laurence E. Salisbury

Second Secretary of Legation
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