File No. 893.51/898c.
The Secretary of State to the American Ambassador to France.
Washington, May 17, 1912—3 p.m.
As to the proposition to be sent to Peking by the London conference setting forth the terms and conditions relating to the preliminary advances and reorganization loan, the Department has made the following statement to the American group:
The Department adheres to its previously stated general views as to control, protection of loans, and financial agency.
The conditions laid down in the proposed telegram to Peking may be very difficult for China to accept at present in their entirety, and the Department believes that if they are to be presented a separate arrangement should be made on the basis of the understanding already reached at Peking for the prompt payment of the essential provisional advances.
The present negotiations with China are of such great importance that the Department feels they should not be broken off without opportunity for full and deliberate consideration and consultation between the groups and the respective governments.
In a letter of April 1 to the American group1 the Department suggested that any uniform measures of control adopted with respect to future Chinese Government loans might perhaps include substantially the following features:
[Page 129]Specific statement of purposes of loan; public statements of accounts; foreign auditors and accountants; foreign advisers and experts when necessary; administration by maritime customs when necessary of revenues pledged as security.
For the further protection of the lenders, to secure from China an undertaking not to negotiate any subsequent loan that might conflict with the legitimate interests or weaken the security of any prior loan negotiated with the approval of the governments concerned.
As to the fiscal agency, the Department stated that it would see no objection in principle provided such agency was acceptable to China and the feature of potential monopoly could be safeguarded, but considered this primarily a question for the groups and the Chinese Government to determine.
You may discuss the matter informally with the Minister for Foreign Affairs, stating our action and inquiring what views have been expressed to the bankers on the subject.
Repeat to embassies at London and Berlin.
- Not printed.↩