File No. 893.51/1383.
No. 778.]
American Legation,
Peking,
March 17, 1913.
[Inclosure—Translation.]
The Minister of Finance of
China to the Sextuple
Group.
Ministry of Finance,
Peking,
March 11, 1913.
Sir: For almost a year negotiations for a
loan made necessary by China’s financial requirements have been in
progress with your groups. The terms of the agreement have been
frequently discussed in Cabinet meetings and the controlling
principles have been arranged satisfactorily. With the exception of
the changes regarding the rate of interest and the discount, which I
assumed responsibility for, all matters have been referred to the
Advisory Council and have been approved. During the negotiations I
endeavored by all possible means to preserve good relations with the
groups. Adhering to this idea I gave way to the utmost in respect of
the demands made by the groups in the hope that a settlement would
be reached at an early date, that order would be maintained and
lasting peace be secured.
The period of negotiations included the end of the old and the new
calendar years and on these two occasions I was placed in a position
of great difficulty as there was most pressing need of funds. I
would recall that at the end of last year, new style, believing that
a method of meeting the urgent conditions would be approved by the
Advisory Council, I succeeded in getting the Cabinet to take the
responsibility for altering the rate of interest from 5% to 5½%.
Then again in your letter of January 28th you stated that with the
exception of the issue price in London and the alterations to
article 13, which were to be discussed, nothing else in the terms of
the agreement would be different from the copy of the agreement sent
on January 15th. You further said that prior to the signature of the
agreement you should receive from your Ministers information that
satisfactory foreign advisers had been engaged for the salt
administration and the bureau of audit and a director for the loans
bureau and that satisfactory agreement had been made with them et
cetera. I at once took steps to engage able and intelligent men,
three in number, to fill these positions. I expected that men who
had been selected for the [their?] ability, irrespective of
nationality, with such great care, would surely be accepted by the
groups but on the 4th of February, when the agreement was all in
order and the groups had agreed to sign the agreement at once and to
make advances, suddenly other complications came up and you could
not keep your word. On the 5th I wrote you declaring that prior to
the signature of the agreement I reserved the right to borrow
elsewhere. Subsequently a reply was received from you saying that so
far as the groups were concerned everything was ready for signature
and that the delay mentioned by me was clearly beyond your power to
control and that you could not take the responsibility. I replied to
this on the 6th declaring that I could not take the responsibility
for anything outside the scope of the agreement and that, as it was
difficult to see how the matter could be brought to a satisfactory
conclusion, [I] could not do otherwise than go elsewhere for the
funds so urgently needed. But I still remained inactive, hoping that
your statement that all was ready for signature would materialize at
an early date. More than a month has passed since the date set for
signature and on the 3rd of March my Government received the
information that the six Governments had decided at a meeting that
nationality was to be the controlling factor as regards the
engagement of foreigners in connection with the loan agreement; that
one Englishman with one German as vice should be appointed to the
salt administration; that in the loans department a German should be
engaged as director; that as regards the number and functions of the
foreigners in the audit department great changes had been made so
that, instead of one foreigner, one Russian and one Frenchman were
to be appointed. Such essential changes in the original
understanding as these had not been calculated upon at any time
during the negotiations.
In the negotiations for this loan there were first frequent delays
and secondly successive changes of the terms of the agreement and I
have been forced into an unimaginably difficult position. The
foreign press for the most part calumniates my country. Foreign
nations blame us for not paying our debts but at the same time every
move they make tends to stop our sources of supply and they do not
allow us to pay our debts. Foreign Governments blame us because the
new regime is not established but their actions are such as to
prevent our raising the funds and they do not allow us to make
progress. Our Government is subjected
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to enormous loss in every way by these delays
and it is truly impossible to delay any longer.
As regards the negotiations for this loan I am deeply grateful for
the good intentions of the groups. Unintentionally all these
complications have arisen so that now the agreement, all ready for
signature, has no more substantiality than a picture cake and cannot
be put into effect. I deeply regret that the conditions are actually
such as described by you in your letter of the 5th February, i. e.,
beyond control. Responsibility therefore cannot be undertaken.
Kindly take note accordingly.
With regards [etc.]
