The British Embassy to the Department of State


The Chinese Government have approached the Far East Development Company, and have asked for their technical service in developing various power, transport and mining projects in the Western Provinces of China, both now and after the war. The Far East Development Company is a combination of a number of British manufacturing firms producing supplies for public utilities, of which the financial control rests with Power Securities Corporation Limited and Associated Electric Industries Limited. The Company and their associates are of first-class standing, and it is understood that they are well known in American financial circles.

2. The Company has been invited by the Chinese Government to send technical experts to advise on the development, particularly in Szechuen and Yunnan, of hydro electric and transport schemes, and on the possibility of opening certain mines.

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3. The Company has no intention of seeking “concessions” of the pre-war kind, but hope to be able to participate in Chinese undertakings. They realize that the Chinese Government will no longer tolerate foreign control of native industries or permit foreign interference with Chinese domestic affairs. It has also been made clear to the Company that funds or supplies from the United Kingdom for the projects in mind are out of the question until there is a major improvement in the supply and transportation position.

4. On the above understanding the Company are willing to undertake the desired investigations on behalf of the Chinese Government, and propose to send experts—possibly Mr. E. M. Bergstrom and Mr. H. C. Young—to China for the purpose. They will keep the British authorities informed of their progress, and are also anxious that the position should be explained to the United States Government. Indeed the Company anticipate if the scheme materializes they may have to seek American participation in the provision of funds and materials.

5. Since the Chinese Ambassador in London has asked His Majesty’s Government to give travel facilities to the Company’s experts and since the investigation is to be undertaken at the request of and for the benefit of the Chinese Government, His Majesty’s Government feel it difficult to refuse the Ambassador’s request merely on the grounds that the projects might later be found to conflict with as yet undefined plans for post-war reconstruction.

6. Unless, therefore, the United States Government see strong objection, His Majesty’s Government do not propose to try to prevent the visit of these experts, but before granting them the necessary exit permits they will endeavour to obtain confirmation from Chungking that their visit is still desired by the Chinese Government. It is some time since the Chinese authorities first approached the Company, and it may be that they have since changed their minds.

7. His Majesty’s Government would be glad to know the views of the United States Government on the foregoing matter. They would too be interested to know whether a similar approach has been made by the Chinese authorities to any American concern.