893.51/3989: Telegram
The Minister in China (Schurman) to the Secretary of State
[Received September 30—9:36 a.m.]
397. Minister for Foreign Affairs 25th asked British consortium representatives here if consortium was prepared to discuss question consolidation Chinese Government’s unsecured internal and external debts and in connection therewith question of advances. Representatives suspected Chinese Government was trying by this question merely to maneuver consortium into position where consortium must make proposal to Government or refuse to consider assisting it. They believed that negotiations were also going on with the Crisp interests.44
Consortium representatives considered question meeting forenoon 27th and instructed British representative Hillier to answer Minister for Foreign Affairs’ question in the affirmative, provided a scheme approved by the representatives should be evolved.
[Page 786]Meeting between Minister for Foreign Affairs and consortium representatives arranged for October 2d to consider matter further.
Afternoon 27th groups representatives by appointment met Minister of Communications to learn how he expected to meet Hukuang coupon and amortization due December 3d amounting to approximately £170,000. They pointed out to Minister great importance of this loan as being only internal loan China quoted both in America and Europe. Minister concurred but suggested raising funds to meet obligation by consortium proceeding with supplementary loan £4,000,000. Representatives declared this not feasible. Minister then referred to plan of floating a consolidated railway domestic loan of $70,000,000 to be secured by increased freight rates and postal and telegraph charges which Government expected to issue immediately after autumn festival October 5th, see second paragraph my 326, July 29, 4 p.m.45 Representatives expressed opinion Hukuang obligations should be immediately secured if possible by some security permanently available for future service loan and suggested that as loan agreement provided that if likin charges were abolished and customs duties increased sufficient customs revenue should be allotted to Hukuang to replace abolished likin. The likin so far as national government is concerned although not legally abolished had practically disappeared. Customs duties have been increased. Therefore representatives held they had a reasonable claim on the customs revenues to replace likin. Minister of Communications replied “yes, that is reasonable” but requested time till after autumn festival for further consideration.
Groups representatives were emphatic in statement that they could not consider any delay whatever in payment of Hukuang coupons December 3d.