893.48/1036a

The Department of State to the Chinese Embassy3

Oral Statement

In reply to the Ambassador’s observations in reference to events on and immediately preceding December 31,—

It does not seem to us that any very useful purpose is to be served by an endeavor to attribute to any one act or to any person or agency involved a special or precise measure of responsibility for the dénouement of December 31.

The simple facts are that the Chinese Government asked of the American Government certain favors in the nature of accommodations with regard to adoption of new schedules, involving deferring of payments, in connection with financial obligations in effect. The American Government indicated a willingness to consider this request favorably but at the same time asked of the Chinese Government an indication of a definite disposition to give appropriate consideration to certain matters of outstanding obligations of that Government. Thereafter, although the Chinese Ambassador gave clear evidence of an attitude sympathetically responsive to the American Government’s request, such evidence as came to the American Government of the Chinese Government’s attitude was indicative of a disinclination if not a flat refusal on the Chinese Government’s part to do anything effective by way of response to the American Government’s request. In addition, it was indicated to the American Government that the Chinese Government would not be satisfied with the plan of deferred payments which the American Government had tentatively suggested in response to the Chinese Government’s request and that the Chinese Government intended to ask for a further revision still more favorable to it. Under these circumstances and with no agreement having been reached, it was logical that the American Government expect full payment by the Chinese Government on the due date of the amount due on that date. The Chinese Government made on the due date the payment due.

It is not perceived that the Chinese Government was in any way “penalized”.

There still remains to be considered the possibility of readjustments in schedules of payments involving an aggregate sum of $17,000,000 plus, as compared with the sum of $3,000,000 plus paid by the Chinese Government on the due date, December 31, 1935.

The American Government is prepared to give further consideration to the question of making readjustments in regard to what remains to [Page 462] be paid. The American Government feels warranted in expecting that the Chinese Government will give further consideration to the request which was made by the American Government in connection with the Chinese Government’s request. The American Government awaits some indication of the Chinese Government’s attitude.

  1. Handed by the Chief of the Division of Far Eastern Affairs to the Chinese Ambassador “for his personal record of conversation.”