893.51/6989
Memorandum of Conversation, by Mr. Raymond C. Mackay, of the Division of Far Eastern Affairs
| Participants: | Mr. Samuel A. King33 |
| Mr. Ballantine34 | |
| Mr. Mackay |
Mr. King, upon invitation, called at the Department and was received by Mr. Ballantine and Mr. Mackay.
Mr. Ballantine informed Mr. King to the effect that, following his and Mr. Watson’s35 call on September 9, further careful consideration was given by the appropriate officers of the Department to the proposed use of the silver fund at Tientsin as collateral for a ten million dollar loan; that, so far as the Department is aware, there are no restrictions or regulations of the American Government which would serve to prevent the consummation of a transaction such as is envisaged; that there exists at least the possibility that the proposed plan [Page 244] has as its primary objective not the purchase of cotton but rather the transfer to the American Government of the responsibility of protecting the silver fund at Tientsin; that in times of armed conflict there are almost certain to be proposed transactions which, when shorn of their technicalities, have as their primary purpose not the consummation of a normal business process but rather the procurement of protection; that the American Government does not approve of transactions of the nature indicated; that there are inherent in the specific plan which has been brought to the attention of the Department by Mr. Watson and Mr. King various factors, including political factors, which, when viewed in the light of the complex and delicate situation now existing in the Far East, might, if the plan were consummated, result in unfortunate developments; and that if such unfortunate developments should occur and the concerned American interests should request the American Government to extend protection to the silver fund at Tientsin, the Department would probably not be in position to comply with such request.
Mr. King, in reply, said that he had noted carefully the views expressed by Mr. Ballantine; that he believed he now had clearly in mind not only the essential factors in the situation but also the attitude of the Department in regard thereto; that he and his associates would reexamine the matter; and that he wished again to express the thanks of his firm for the Department’s attitude of cooperation.