893.51 Russian Issue/44
The Secretary of State to the Ambassador in China (Johnson)
Sir: The Department refers to its instruction No. 229 of July 31, 1936,7 and to previous correspondence in regard to the Russian issue of the Chinese Government Five Per Cent Reorganization Gold Loan of 1913 and, in this connection, encloses, for the information of and appropriate action by the Embassy, a copy of a letter under date August 28, 1936, from J. G. White and Company,7 and, with the exception of the detailed lists of bonds sold by J. G. White and Company and Paine, Webber and Company, copies of the enclosures as mentioned therein.7
It will be noted from the copies of correspondence attached hereto that, although certain details are lacking, there would appear to [Page 596] exist no doubt that a settlement was made by the Chinese Government with a British bondholders committee; that the settlement provided for a cash payment, against delivery in Shanghai with all overdue coupons attached, of thirty per cent of the principal amount of British-owned bonds of the Russian issue under reference; and that payment was actually made to British owners of such bonds as were deposited with the British bondholders committee. There would further appear to exist at least a possibility that about six years ago Japanese holders of bonds of the Russian issue under reference received from the Chinese Government terms of settlement similar to those recently accorded to British bondholders.
In consideration of the above, it is the Department’s desire that the Embassy, unless it perceives objection thereto, bring this subject to the attention of the appropriate authorities of the Chinese Government with a view to obtaining for American holders of the issue under reference an opportunity to receive from the Chinese Government, if they so desire, payment for their bonds on terms no less favorable than those granted to bondholders of other nationality.
In this connection, it is the Department’s understanding that bonds in principal amount of £55,660 were sold by J. G. White and Company and in principal amount of £11,600 by Paine, Webber and Company.
Very truly yours,