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The President of the Technical Board (Stevens) to the Secretary of State
[Received May 26—12:45 a.m.]
Chinese Eastern Railway pay-roll obligations will amount within a few days to about 900,000 roubles in gold, and the amount of money in sight to meet these charges is not more than 225,000 roubles. Bills for large amounts are due also on current accounts, with no cash available for payment. I cannot see any way by which the railway can continue to borrow; there may be a source from which funds could be obtained, perhaps through Chang Tso-lin, but it is not likely that they will be. The railway will not get a dollar from me, even if transportation is tied up. The Technical Board is being deliberately ignored in every way by the Board of Directors and the Administration who cut rates far below the operating costs, dissipate revenues, make suicidal contracts and incur useless expenses … The Technical Board has vigorously protested, but in vain. What little business is done is at a loss which increases daily. Before long the railway must collapse.
My prediction to Senator Root regarding the effect of the Washington Conference resolution pretending to fix responsibility on the Chinese Government has come true. That Government now considers the railway as belonging to it. It is useless to keep up farce of longer continuing the Technical Board unless active steps are immediately taken to put it on a firm foundation. … The Inter-Allied Railway Agreement is absolutely worthless as matters stand and it does not seem to be receiving any support.