forwarded in my despatch 2160, July 27, Minister of Foreign Affairs quotes Ministry of Finance as follows: Article 8 specifies and [all?] forests and mines of two provinces only as security for a temporary period. The Chinese Government has this sort of executive power, this is indisputable. Article 9 only gives priority rights in case the Government wishes to make further loans on the said security. A careful examination of the agreement and the accompanying notes shows that there is no passage to the effect that those of other nationality are not allowed to cooperate. As the text forwarded with my despatch above cited is stated not to be accurate, I am requesting an autograph transcript for submission to you. MACMURRAY File No. 893.51/2931 The Chargé in China (MacMurray) to the Secretary of State No. 2238 PEKING, September 10, 1918. SIR: Supplementing the Legation's despatch (No. 2160) of July 27 last, on the subject of the Kirin forestry loan, and referring also to my telegram of August 22, 7 p. m. [6 p. m.], I have the honor to enclose herewith a translation of the note (No. 834) of August 21, by which the Foreign Office communicated the reply of the Ministry of Finance to my inquiry of July 27, and a copy of the further note (No. 832) which I addressed to the Foreign Office on this subject on the 31st ultimo. I also enclose herewith a clipping from the Peking Leader of August 16, reporting a mass meeting held in Kirin for the discussion of measures with a view to the cancelation of this loan agreement. In this connection, I take occasion to enclose herewith a clipping from to-day's issue of the Peking Leader, giving the substance of certain suggestions made by the provincial authorities of Kirin in regard to the proposed amendment of certain terms of the agreement. I have [etc.] [Enclosure 1-Translation] J. V. A. MACMURRAY The Chinese Ministry for Foreign Affairs to the Chargé in China (MacMurray) No. 834 PEKING, August 21, 1918. SIR: We have the honor to acknowledge the receipt of your note (of July 27, 1918). (The note in question is then fully quoted.) This Ministry has referred the matter to the Ministry of Finance which now replies as follows: The Heilungkiang and Chi-lin [Kirin] forestry and mines loan contract has been duly signed. The translation published in the Peking Leader was probably based on outside report and is not strictly accurate. The following passages however are accurate : ARTICLE 8. The "A" party agrees to pledge to the "B" party the following articles as security for the repayment of the loan and the payment of interest: (1) All the gold mines and government-owned forests in the two provinces of Kirin and Heilungkiang. ARTICLE 9. Whenever during the currency of this agreement. the "A" party desires to contract a loan or loans from another party on the aforesaid gold mines and government-owned forests or on other incomes derived therefrom, the said party shall consult with the B party beforehand. 1 Not printed. Now the Article 8 specifies the forests and gold mines of two provinces only, as security for a temporary period. The Chinese Government has this sort of executive power. This is indisputable. Article 9 only gives priority rights in case the Government wishes to make further loans of the said security. A careful scrutiny of the agreement and the accompanying notes shows that there is no passage to the effect that those of other nationality are not allowed to cooperate. As in duty bound we transmit this statement for your consideration. CH'EN LU [Enclosure 2] The Chargé in China (MacMurray) to the Chinese Minister for Foreign Affairs (Lu Cheng-hsiang) No. 832 PEKING, August 13, 1918. EXCELLENCY: I have the honor to acknowledge the receipt of your excellency's note of August 21, containing the reply of the Minister of Finance concerning the Heilungkiang-Kirin forestry loan. In order to avoid possible misunderstandings regarding this transaction, as his excellency, the Minister of Finance, states that the text of the loan agreement as published in the local press is not entirely accurate, I have the honor to request that the Legation may be furnished with a copy of the actual agreement with the annexed notes to which the Minister of Finance makes allusion, for the use of my Government. I avail [etc.] J. V. A. MACMURRAY File No. 893.51/1972 The Secretary of State to the Chargé in China (MacMurray) [Telegram] WASHINGTON, September 24, 1918, 3 p. m. Your August 22, 6 p. m. Should an authentic copy of the texts of the agreement and exchange of notes relating to a loan on the security of the forests and mines in Kirin and Heilungkiang Provinces confirm substantially the texts forwarded with your despatch of July 27 last you will lodge with the Chinese Government a formal protest against the monopolistic features of the said agreement. LANSING File No. 893.51/2027 The Chargé in China (MacMurray) to the Secretary of State [Telegram] PEKING, October 8, 1918, 2 p. m. Your September 24, 3 p. m. Ministry of Finance declined to communicate texts of Kirin forestry agreement and notes. MACMURRAY The Acting Secretary of State to the Chargé in China (MacMurray) [Telegram] WASHINGTON, October 10, 1918, 11 a. m. Your October 8, 2 p. m., and referring to note from Foreign Office of August 21, 1918. You may inquire of the Chinese Government whether this Government is to understand from the closing sentence of the reply of the Ministry of Finance that those of other nationality including American citizens will be allowed to cooperate in the Kirin forestry agreement and its subsidiary privileges. POLK Other Loans File No. 893.51/1896 The Minister in China (Reinsch) to the Secretary of State No. 1996 PEKING, April 12, 1918. SIR: I have the honor to enclose a list of loans made to the Chinese Government during the year 1917, and during January of the present year. I have [etc.] PAUL S. REINSCH |