893.51/6958
The Chinese Ambassador (Hu Shih) to the Secretary of State
My Dear Mr. Secretary: Acting under instructions of His Excellency, Dr. H. H. Kung, President of the Executive Yuan and concurrently Minister of Finance, I beg to inform you that the Chinese Government has earnestly desired to make an arrangement for the resumption of foreign loan services as the result of the negotiations initiated last Spring. However, the unexpected difficulties in the Shanghai Exchange Market in the past few weeks which were considerably aggravated by the Japanese threat to the Foreign Concessions, have forced the Government to delay putting forward the offer it had intended to make. Under existing circumstances, the Government has been most reluctantly forced to the conclusion that it is not able at this time to proceed with these negotiations and to transfer abroad the substantial amounts of foreign exchange contemplated.
I am instructed to assure you that the interruption of debt services which is caused solely by the Japanese invasion is only temporary and that the Chinese Government intends to resume full services of its obligations at the earliest possible moment.
Similar communications are being sent to the Belgian, British, French and German Governments.
I shall be greatly obliged if you will be good enough to explain this situation confidentially to the Foreign Bondholders’ Protective Council, J. P. Morgan & Company and Continental Illinois National Bank and Trust Company of Chicago.90
I am [etc.]
- In acknowledging this note on August 4 the Acting Secretary of State informed the Chinese Ambassador that this had been done.↩