Foreign Relations of the United States Diplomatic Papers, 1935, The Far East, Volume III

893.51 Con- Ob- Chinese Engineering and Development Co./22

The American Embassy in China to the Chinese Ministry for Foreign Affairs⁴⁶

Memorandum

The American Embassy presents its compliments to the Ministry of Foreign Affairs and has the honor to refer to the Ministry’s memorandum of October 9, 1935, concerning, inter alia, the claim of the Chinese Engineering and Development Company, an American firm, against the Tientsin–Pukow Railway. The Ministry’s memorandum quotes a communication from the Ministry of Railways in which it is stated that

“Although the Tientsin-Pukow Railway has already proposed an arrangement for the adjustment (of its debts), no comparison can be made with the Peiping–Hankow Railway, because of economic conditions. As the financial resources (of the Railway) at present are not sufficient for distribution, it is difficult at present to carry out the proposed arrangement.”

This statement does not appear to be in agreement with information which has reached the Embassy to the effect that British creditors of the Railway are being paid under an arrangement entered into in 1933 and that the Tientsin–Pukow Railway loan negotiated by the Mitsui Bussan Kaisha, is being liquidated to the satisfaction of the Japanese creditors.

The Embassy’s memorandum of September 17, 1935, mentioned a press report of payment to Japanese creditors and asked to be advised whether that particular report was correct but the Ministry’s memorandum of October 9 failed to supply this information. The Embassy’s memorandum of September 17 also mentioned that Mr. Harry A. Raider, President and General Manager of the Chinese Engineering and Development Company, had repeatedly endeavored to effect an arrangement by which the Company’s claim might be liquidated, but that for reasons unknown to him or to the Embassy neither the Tientsin–Pukow Railway nor the Ministry of Railways had been willing to negotiate a settlement. Mr. Raider has recently visited Nanking again in this connection and a letter from him dated December 13, 1935, states that his further efforts to obtain a settlement have been unavailing.

Since it would appear that British and Japanese creditors of the Tientsin–Pukow Railway are being paid, the Embassy is at a loss to understand the reluctance of the Ministry of Railways to conclude a settlement with the American firm in question. The Embassy therefore earnestly requests that the Foreign Office bring to the attention of the Ministry of Railways this apparent discrimination against an American creditor of the Tientsin–Pukow Railway and that it urge the Ministry to arrange a settlement with Mr. Raider, who plans to return to Nanking in a few days for that purpose.⁴⁷

Nanking , December 16, 1935.

46. Copy transmitted to the Department by the Ambassador in China in his despatch No. 147, April 24, 1936; received June 1.
47. This claim was settled by an agreement signed by Mr. H. A. Raider for the Chinese Engineering and Development Company, and Mr. C. H. Yang, Managing Director of the Tientsin–Pukow Railway, March 31, 1936. The agreement provided for a total payment of Y$94,512.00 in 60 noninterest-bearing monthly payments beginning July 1934; Y$33,079.20, representing the installments from July 1934, to be paid 10 days after date of the agreement. (893.51 Con. Ob. Chinese Engineering and Development Co. /22)