}
[This Document is the Property of His Britannic Majesty's Government.]
AFFAIRS OF CHINA.
CONFIDENTIAL.
[November 7.]
SECTION 2.
[40615]
No. L.
Mr. Max Müller to Sir Edward Grey.-(Received November 7.)
(No. 183.) (Telegraphic.) R.
Peking, November 7, 1910. YOUR telegram No. 140 of 3rd November: American loan. American Minister told me yesterday that memorandum was not signed by hita, but by representative of American group, and contained no conditions but price and rate of interest. He added that, acting on instructions from his Government, he had informed Chinese Government that participation of three European groups was a condition of the loan; the Chinese, however, were anxious that negotiations should be exclusively with Americans, and that larger share of bonds should be floated on American market. He had explained that this was a question for financiers to decide.
I oxpressed hope that, in view of possible future joint loans, present contract might be signed by all four groups, and would contain strict conditions as regards security and employment of proceeds. In regard to security, he had acceded to wish of Chinese Government that this should be entirely reserved for final agreement; it was a question for financiers, though he was inclined to rely more especially on Imperial guarantee. As to control, system of assigning proceeds to a definite commercial object was out of date, and he had advocated appointment of a foreign adviser, not necessarily an American, to control expenditure of loan funds and the refonu of the currency. Chinese Government had assented to principle of a foreign adviser, who should have cognisance of application, but not control, of the loan funds.
American Minister said that he was pleased at this opportunity of increasing his country's holding in China, but he would rather see the loan fall through than be a fle expressed hope that party to lending 10 millions to China without any control.
four Governments might come to some agreeiuent as to conditions of future loans to China, as, though they could not prevent their nationals outside the four groups from lending money to China, at any rate, we should have the knowledge that a loan which had not the support of their Governments would probably prevent the public from taking it up.
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