893.51 Russian Issue/77: Telegram
The Ambassador in China (Johnson) to the Secretary of State
[Received June 30—5:30 a.m.]
419. Department’s 118, June 28, 6 p.m.2 Following is summary of reply3 of the Minister of Finance dated June 27 in regard to American holders of Chinese Government bonds of the Russian series:
In 1922 the Chinese Government gave an opportunity for several years for holders of Russian series yellow bonds to exchange them for green bonds. The Chinese Government is therefore not in a position to recognize old bonds of this issue. Several years ago the British Government supported the claims of certain holders of yellow bonds. The Chinese Government at first replied that it could not recognize these claims but subsequently bondholders’ bank purchased from the British holders a certain number of the bonds and at that time the Chinese Government announced this was not a precedent and it was understood the British Government would present no further claims of this sort. The Minister of Finance knows of no other similar purchases. In the present case as soon as circumstances permit, the Ministry of Finance will be prepared to use its good offices with one or more Chinese banks with a view to the purchase of a limited number of such bonds from bona fide American holders on the understanding that such purchase would be without prejudice nor constitute a precedent; “and that in view of the length of time which has elapsed since 1922 no further claim would be supported by the American Government over and above the amount of claims not exceeding 70,000 pounds of the present claims on the date of the purchase from British holders which according to my recollection was about January 1, 1936. Also in view of altered conditions any purchase of such bonds by Chinese banks would not necessarily be on the same percentage basis as the purchase aforementioned which was made about January 1, 1936.”