893.51 Con. Ob. Andersen, Meyer and Co./28

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

No. 246

Sir: The Department refers to the Embassy’s despatch No. 3740 of August 13, 1935,5 and to the Department’s instruction No. 23 of November 2, 1935,4 in regard to the financial condition of the Peiping–Hankow Railway, and encloses, for consideration and appropriate action by the Embassy, a copy of a letter under date August 19, 1936,4 together with its enclosures, received by the Department from The Baldwin Locomotive Works.

[Page 595]

It will be noted that, with reference to the agreement of October 31, 1933, by and between the Ministry of Railways of the National Government of the Republic of China on the one hand and the General American Car Company, Andersen, Meyer and Company, Limited, and The Baldwin Locomotive Works on the other hand, the American creditors named are of the opinion that the financial condition of the Peiping–Hankow Railway has so materially improved as to warrant implementation of that portion of the agreement under reference which provides that, “as and when there is an improvement in the financial condition of the Peiping–Hankow Railway”, the amount of the monthly payments specified in paragraph 2 of the agreement ($50,000 Chinese currency) shall be increased.

Based upon such information as is now available to the Department, particularly that contained in the enclosures to the aforementioned letter of August 19, 1936, from The Baldwin Locomotive Works, the Department is of the opinion that the Embassy, unless it perceives objection thereto, should seek by the use of all appropriate and practicable means to cause the Chinese Ministry of Railways to fulfill the obligations incurred by it in connection with the terms of the above-mentioned agreement of October 31, 1933.6

Very truly yours,

For the Secretary of State:
R. Walton Moore
  1. Not printed; for an enclosure transmitted with this despatch, see Foreign Relations, 1935, vol. iii, p. 760.
  2. Not printed.
  3. Not printed.
  4. The Ambassador in China in his despatch No. 783, October 14, stated: “This is the policy which the Embassy has been pursuing for the last year.” (893.51 Con. Ob. Andersen, Meyer and Co./32)