File No. 893.00/2928 The Minister in China (Reinsch) to the Secretary of State No. 2354 PEKING, December 2, 1918. SIR: In connection with my despatch (No. 2337)1 reporting on the representations made in favor of reconciliation in China, I have the honor to enclose copies of the aide-mémoire as it was finally adopted by the Ministers and presented to the President of the Republic and the Southern leaders. The only change from the version transmitted to you is the insertion near the middle of the second paragraph of the clause, "while refraining from taking any step which might obstruct peace." This clause was inserted at my suggestion in order to give a hint that the taking, by either party, of action which by the other would be considered a fatal obstruction to peace ought to be avoided; such as, for instance, the election of a Northern militarist as Vice President would have been. The aide-mémoire was presented to His Excellency, the President, at 4 o'clock this afternoon. The exact date and hour of the presentation in Canton is not yet known to me. It is, however, intended to be as nearly contemporaneous with the action here as is possible. I have [etc.] PAUL S. REINSCH [Enclosure] AIDE-MÉMOIRE It is with grave concern that the Governments of France, Great Britain, Italy, Japan and the United States have witnessed the continued civil strife which during the past two years has divided this country. This unhappy division has proved no less harmful to foreign interests than disastrous to the welfare of China itself. The consequent unrest has been an encouragement to the enemy, and during the supreme crisis of the war has hampered the effective cooperation of China with the Allies: and now that that crisis is past and the nations look forward to the hope of effecting some organization of the world for the realization of peace and justice among all peoples, the disunion still prevailing in China makes their task more difficult. The associated Governments of France, Great Britain, Italy, Japan and the United States have observed with hopefulness the steps already taken by the President of the Republic with a view to the settlement of the civil strife, and have been happy to believe that the attitude of the Southern leaders indicated no less a desire on their part to arrive at an amicable adjustment of differences. These Governments have therefore taken occasion to express the sympathy and the hopefulness with which they regard these indications of a desire on the part of both the Peking Government and the leaders of the Southern party to set aside all considerations of merely personal sentiment and of legal technicality, and while refraining from taking any step which might obstruct peace to seek without delay by frank conference some means of attaining a reconciliation, upon a basis of law and of devotion to the interests of the Chinese nation, such as is necessary to assure to China peace and unity within its borders. In taking occasion to express their earnest sympathy with the efforts of both sides to achieve a solution of the difficulties that have hitherto divided them, the Governments of France, Great Britain, Italy, Japan and the United States desire to make clear that in so doing they have in contemplation no ulterior plan of intervention and no desire to control or influence the particular terms of adjustment, which must remain for the Chinese themselves to arrange. They desire only to lend what encouragement they can to the aspirations and efforts of both parties for a reconciliation and a reunion which will enable to [the?] Chinese nation to bear the more worthily of its own traditions its part in the reconstruction which the nations of the world are now hoping to attain. 'Not printed. File No. 893.00/2900 The Acting Secretary of State to the Minister in China (Reinsch) [Telegram] WASHINGTON, December 5, 1918, 8 p. m. The Japanese Embassy informs the Department that the Peking authorities have approached Japanese bankers for a loan for the disbandment of troops, but that the Japanese Government is not disposed to sanction any loan for that purpose lest it should lead to misunderstanding with the Southern leaders. The Chinese authorities stated however that American bankers were ready to make such loan if Japan did not. You will of course discourage any such proposal, if made, and be guided by the Department's telegram of November 16, 6 p. m., with which the Japanese Government is in accord. POLK File No. 893.00/2948 The Minister in China (Reinsch) to the Secretary of State No. 2424 [Extract] PEKING, December 31, 1918. SIR: I have the honor to enclose the following despatches dealing with the progress of reconciliation in China.1 The effects of the joint démarche of the five powers have been good in as far as predisposing the Northern military party to give President Hsü Shih-ch'ang an opportunity to carry out his conciliation policy. A peace delegation of ten members has been appointed by the Government, which is now proceeding to Nanking. The Southern authorities have not as yet appointed their delegation although it is generally understood that Mr. Tong Shao-yi will act as chief delegate, that position having been offered him by the Military Government. The South is raising difficulties on two points: (a) the place of meeting, which they desire to be at Shanghai rather than at Nanking (the place suggested by the Chinese Government and favored by Governor Li Shun, who [h]as hitherto acted as chief mediator); (b) the South claims that Northern military movements in Shensi and Fukien Provinces are contrary to the armistice; whereas the Chinese Government charges with some justice that actual advances have been attempted and made in these provinces by military leaders connected with the South in charge either of regular troops or of irregular contingents, qualified as bandits. Reports are now being awaited from the Northern delegation, which is under the chairmanship of Mr. Chu Ch'i-ch'ien, ex-Minister of the Interior. Although there are many obstacles to peace and although the militarists on both sides, notwithstanding public declarations made, seem still to be receiving financial assistance from outside sources, yet the general feeling is that a compromise will be effected at an early date. PAUL S. REINSCH I have [etc.] 'Not printed. File No. 893.00/2960 The Consul at Canton (Pontius) to the Minister in China (Reinsch) No. 39 CANTON, December 31, 1918. SIR: For the information of the Legation I have the honor to enclose copy of a telegram dispatched by the local Parliament to the United States Congress emphasizing once more the aims of the Constitutionalists and complaining at the recent breach of faith on the part of the North in dispatching additional troops to the vicinity of points occupied by the South. Certain members of the local Parliament are constantly agitating the question of intervention by the President of the United States. Intervention would be better than arbitration they contend as the consent of the North need not be sought for in that eventuality. Practically all of the local dignitaries favor arbitration by the President of the United States, and it is reported it is quite likely that a telegram will be dispatched to the United States Congress requesting that body to recommend such action. I have [etc.] [Enclosure] ALBERT W. PONTIUS The Canton Parliament to the Congress of the United States THE PRESIDING OFFICERS AND MEMBERS OF THE CONGRESS, Washington. Canton, China. It is with gratitude that the people of China have learned that the five associated powers of France, Great Britain, Italy, Japan and the United States, have, by their memorandum recently presented to the Government at Peking and the Constitutionalists' Government at Canton, expressed their hope for an early settlement of the internal strife in our country. The impartial attitude of the associated powers toward the two contending parties is well manifested in the memorandum in which it was stated that they have in contemplation no ulterior plan of intervention and no desire to control or influence particular terms of adjustment which must remain for Chinese themselves to arrange. The Constitutionalists' Government at Canton has now entered peace negotiations with the military leaders of the North, for, as stated in the memorandum, the unhappy division of the country has proved not only disastrous to the welfare of China itself, but it also makes more difficult the great task of world reconstruction. However, we must make it clear to the Government and people of your country that our present civil strife is the legal against the illegal and the right against the wrong. It is intolerable that the supreme law of the land is being so wilfully violated by a handful of militarists, whose ulterior object is to enforce despotism by means of militarism. The sole object of the Constitutionalists is nothing but devotion to the interests of the Chinese people and for securing a peace upon the basis of law, and there is not the least personal sentiment or contention merely for the sake of legal technicality. The Republic of China is existing upon the Provisional Constitution, from which the National Assembly derives its authority, and it was for the upholding of this Provisional Constitution the Constitutionalists have taken up arms against the militarists. It will be remembered that when Yuan Shih-k'ai declared himself Emperor, the Provisional Constitution had been for the first time violated and the National Assembly by force dissolved, and when the monarchial restoration movement instigated by the militarists broke out, then it was for the second time [that] the Provisional Constitution [was] violated and the National Assembly dissolved. It was the militarists and the bureaucratic class who were directly responsible for all these law-breaking movements. [That] the Northern milita rists are not to be trusted is again proved by the fact that since an armistice has been recently declared, the Peking authority has continued sending troops to attack the Constitutionalist force in the Provinces of Shensi and Fukien, under the pretext of suppressing the bandits. The Northern leader, Ch'ien Neng-hsün, even admitted dispatching troops to Shensi under the command of Hsü Lanchow, and troops to Fukien under the command of Wan Yung-chuen, after the declaration of armistice. Seeing that the militarists are not to be trusted even on their solemn oath, the people of China realize more and more that the object of the Constitutionalists' movement for securing a permanent peace and restoring the effect of law is the only solution of the national issue now at stake. But, unless the National Assembly is assured perfect freedom to exercise its legitimate functions, there is no hope for restoring the effect of law, and unless the law is enforced there is no hope for permanent peace, and it is for upholding the law, the people of China have been struggling under the most difficult circumstances. Knowing that your country is always ready to uphold the right, as such spirit has been well manifested through your friendly memorandum, we, therefore, desire to make it clear to you the real cause of our present strife. On behalf of the National Assembly of the Republic of China. LIN SUN President of the Senate Speaker of the House of Representatives LOAN NEGOTIATIONS Currency Reorganization and Loan and Currency Reform1 File No. 893.51/1857 The Ambassador in Great Britain (Page) to the Secretary of State [Telegram] LONDON, January 1, 1918, 2 p. m. 8116. My 8038, December 21, 11 p. m.' I have just received the following note: FOREIGN OFFICE, December 31, 1917. I have the honour to inform you that His Majesty's Government have given their careful and sympathetic consideration to note which you were good enough to address to me on 24th November stating that the United States Government were contemplating formation of American group to participate in projected loan of twenty million pounds to China for currency reform purposes and urging participation of British group in proposed initial advance of two million pounds which existing international consortium has agreed should be made to Chinese Government by Japanese group. The Lords Commissioners of His Majesty's Treasury whose consent is required under existing enactments to all financial operations by British subjects involving new issues of capital and to whom question of participation of British groups in above-mentioned initial advance was, therefore, referred, have arrived at decision that in considering distribution of financial resources of country, it is incumbent on them to give precedence to immediate demands occasioned by war over post-bellum interests. As represented by proposed participation, they state that in their opinion effect on these resources of proposed participation would be to weaken pro tanto the capacity of country to meet immediate war demands and accordingly they regret that they are unable to give their consent to such participation by British groups. His Majesty's Government are nevertheless very anxious to facilitate in every way reentry of an American group into international consortium and eventual participation of group when organised in definite loan. As I understand, however, from your excellency that the United States Government would wish to make eventual participation of American group in loan conditional upon participation of British group in advance and as decision of His Majesty's Treasury unfortunately renders course suggested in your excellency's note impracticable, I have the honour to suggest that nominal participation of British group in advance, if desired by the United States Government for political reasons, might be assured by an arrangement between American and British groups whereby former would agree to carry latter's share of advance till after war. It is suggested as a practical means for giving effect to this proposal that American groups should be informed that if they are prepared to advance two thirds, the Japanese advancing the remaining third of two million pounds, namely, £1,333,333 6s. Sd., in exchange for Chinese Treasury bills for an equivalent amount, British groups would be prepared to accept nominal participation of half of that amount, namely, £666,666 13s. 4d., and to guarantee repayment of that share if not already repaid by Chinese Government within one year after war. I have to request your excellency to be so good as to submit foregoing proposal to the United States Government and to suggest that if it meets with their approval, the most convenient method of ensuring its adoption would be for them to put it forward as their own and to address it officially to His Majesty's Government for communication to the British group. I may remind your excellency that in view of fact that British group declined participation in proposed advance when question was originally raised, consent of Japanese groups will have to be obtained to participation now contemplated and I should be greatly obliged if you would enquire whether the United States Government consider that British group should approach Japanese group in matter or whether it would in their opinion be preferable that they should themselves inform Japanese Government of arrangement come to, having regard to their decision to constitute an American group with view to eventual participation in loan. In connexion with suggestion contained in your note, that in event of British participation in initial advance being found practical, American group when organized might entertain a proposition to carry temporarily British group's future participation in loan, I desire to point out to your excellency that if American group is readmitted to consortium, it will necessarily be bound by all existing bankers' agreements in respect to Chinese loan transactions and that terms of Article 4 of sextuple group agreement of 18th June 1912, governing question of so-called residuary participation in reorganisation loan, of which projected loan may be considered to be supplementary issue, would appear to preclude British and American groups from coming to any private arrangement between themselves such as is suggested in your note. It is laid down in that agreement that groups which actually take part in issue of loan are entitled to decide among themselves and without reference to group or groups which do not participate in issue as to which one or more of them shall issue residuary participation and that in default of any such decision they shall issue same equally between them. While therefore His Majesty's Government are grateful for suggestion of which they will avail themselves in case of necessity, it is evident that question of residuary participation will necessitate a preliminary discussion with Japanese group. Finally, it may be of interest to United States Government to know that according to our last advices from Peking, Japanese group has decided to defer making proposed advance on account of uncertainty of political situation in China and until a stable government is in sight. It is not anticipated, however, that project will be abandoned altogether. I have [etc.] PAGE The Secretary of State to the Minister in China (Reinsch) [Telegram] WASHINGTON, January 5, 1918, 2 p. m. British Government informs Department through Embassy at London that latest advices from Peking indicate that "Japanese |