893.51 Con. Ob. General American Car Co./21: Telegram
The Chargé in China (Peck) to the Secretary of State
[Received 10:27 a.m.]
140. Department’s 23, February 2, 5 p.m.,11 debt of Peiping-Hankow Railway to General American Car Company. Note was sent to the Chinese Ministry of Foreign Affairs on February 4 based on a statement contained in a telegram from Peiping of January 4, 3 [Page 294] p.m.,12 and expressing hope of the Embassy that the just obligations of the National Government might be promptly and freely met.
Reply of February 18 quotes the Ministry of Communications as stating (Embassy’s translation):
“It is observed that the debts in question were carried out after adjustment according to agreement. When hostilities broke out, railway income dwindled but this Ministry continued to exhaust every effort to maintain its obligations. It has made payments up to June 1938. The conditions under which such payments have been delayed were really created by an incident for which the Chinese Government cannot be held responsible and which was not originally anticipated. This Ministry cannot recognize the principal and interest computed by Mr. W. W. Fowler13 according to the arrangement made prior to adjustment.
This Ministry is continuing to exhaust every effort to raise funds to pay the sums due under the revised adjustment agreement and strongly hopes that normal conditions may be restored on the Peiping–Hankow Railway at an early day so that obstacles to the carrying out of the aforementioned agreement may naturally be removed. Please take note and convey this reply to the parties concerned for their information and consideration”.
Repeated to Peiping.