861.77/2602: Telegram
The Minister in China (Schurman) to the Secretary of State
[Received July 7—1:52 p.m.]
295. Referring to your telegram of June 27th via Japan. An acceptable substitute for the Technical Board, as far as the Chinese Government is concerned, would be to appoint American and European employees to administrative positions on the Chinese Eastern. However highly placed these appointees might be, I am afraid that they would still be subordinate with no means of compelling the acceptance of their policies. This plan would seem to provide international cooperation, but real control would be lacking. Rather than have such fictitious foreign cooperation with implied responsibility it would be better for the Powers to accept in practice the claim of China to the administration of the Chinese Eastern Railway and to hold China to strict, sole accountability for the performance of the obligations which she thus assumes to preserve the railway for the benefit of its owners and to keep it freely open as a highway for commerce. I think that this accountability might be made effective by the creation of an inter-Allied board of observation to replace the Technical Board. This new board would have no powers of control. Its duties would be to observe and to report to the interested Governments how the Chinese Government fulfilled [Page 903] its duties and overcame the [apparent omission] which the Washington Conference resolutions regarding the Chinese Eastern indicated. In this manner international opinion could be informed and at any time it could be invoked by diplomatic initiative and brought to bear upon special complaints and delinquencies. It would be natural to select as members of the observation board the consuls at Harbin representing the interested nations. It would mean no large extra expense for the consulates, but I would suggest the advisability of raising our consul to the rank of consul general so that none of his colleagues would outrank him. The Chinese Government probably would accept such an international observation board as the price of getting rid of the Technical Board. This plan might be combined with that mentioned at the beginning of this telegram, that of having foreign employees on the railway.
A third substitute is to retain the international character of the present Board, discontinue its technical and operative functions, and change it into an auditing board controlling the finances of the railway and having the right of inspecting its operations and criticizing its manager. China is not yet ready for this plan but the financial plight of the Chinese Eastern Railway may force her to accept it if the interested powers are willing to loan the railway a substantial amount.
It is my understanding that the manager of the Russo-Asiatic Bank has suggested this plan and after it was approved by Paris presented it to the Premier, the Minister of Communications and others. The bank considers that it is for the Chinese Government, rather than the bank, to propose the plan to the Ministers of the four Powers concerned. The bank expects the Chinese Government to make this proposal soon, but I believe that only dire necessity will lead the Government to do this. International control of any sort is opposed by both the people and Government of China. W. W. Yen anticipates that debates in the coming session of Parliament regarding such international control will endanger the Government.