The Counselor of Embassy in China ( Peck ) to the Secretary of State
[Received 2:10 p.m.]
118. My 100, March 3, 9 a.m.93 The following letter dated March 13 and addressed to the Ambassador was received March 15 from Dr. H. H. Kung.
“With reference to my letter of March 1 concerning the proposed Hukuang loan settlement, I enclose a copy of a telegram received on March 11 from Mr. J. Reuben Clark, Junior, of the Foreign Bondholders Protective Council Incorporated, New York.
The draft announcement, as sent to you on March 1 for communication to representatives in the United States of the American creditors, was also then communicated to the representatives in China of the four national groups. Previously it had been fully discussed with the latter representatives who found it acceptable for transmittal to their principals, and I understand it was so transmitted by the British, French and German representatives.
I feel that the best procedure would be for the creditor representatives in the different countries fully to communicate with each other so that they may express collectively to the Government their views concerning the draft announcement. Communication among all the creditor representatives in the United States and Europe in order to ascertain their common views obviously is much simpler than to have the Chinese Government in effect act as an intermediary. Considerable further delay would now result were I to discuss particular points [Page 667] of work with the Council or with any individual group before all the creditor representatives have fully communicated with each other.
Therefore, in the hope of effecting an early agreement, I should greatly appreciate your cabling to the Department of State that this Government would be grateful if the Department would explain the situation to the American creditors’ representatives and use its good offices in favor of adoption of the procedure I have indicated.
With reference to the inquiry in Mr. Clark’s telegram concerning customs charges, I should appreciate your communicating to him that other than the report from local authorities (see page 10 of the last published Finance Ministry report) which ranks as of March 1, 1936, no charges have been placed on the customs revenue subsequent to the Tientsin–Pukow Railway settlement which covers the 3,150,000 pounds of outstanding bonds plus 678,000 pounds of bonds subsequently validated to settle the advance made by Deutsch-Asiatische Bank before 1916 secured on unissued Tientsin–Pukow Railway bonds; and that no other charges will be permitted on the customs revenue before the announcement is made, provided that it is made promptly. (Foregoing word underscored by the writer).
With reference to the last sentence of Mr. Clark’s cablegram, there are no documents to be communicated additional to the announcement and the memorandum communicated to you on March 1. And further, I understand that you telegraphed to Washington the text of the memorandum as well as of the draft announcement.”
The Department has doubtless received a copy of Clark’s telegram.94
Sent to the Department; by mail to Peiping.