File No. 893.51/184
The Secretary of State to Mr. G. M. Gest
Washington, December 17, 1917.
Sir: I have to acknowledge the receipt of your letter of this date relating to a contract between Messrs. Lee, Higginson and Company and the Chinese Government for a loan and asking to be advised of the attitude taken by this Department towards the making of further advances upon the loan as expressed in my letter to the Secretary of the Treasury and also the attitude of the Treasury Department as shown in its letter to me.
In reply I have to state that on December 14, 1917, I wrote to the Secretary of the Treasury informing him of the fact that on April 7, 1916, Messrs. Lee, Higginson and Company had entered into a contract to lend the Chinese Government 5,000,000 dollars for a three year term, and that in pursuance of that contract, approximately 1,100,000 dollars had been advanced, of which the sum of $265,000.00 including interest had been repaid. I stated further that under the terms of the contract Messrs. Lee, Higginson and Company had the option of making further advances up to 5,000,000 dollars and that they were now making inquiry as to whether or not the policy of the Government would permit them should they so desire, to execute the contract further by making additional advances to China. I added that in so far as the State Department was concerned the loan seemed to be desirable.
Today I am in receipt of a reply from the Secretary of the Treasury saying that he had no objection to make.
There being no objection on the part of the Treasury Department, Messrs. Lee, Higginson and Company are of course at liberty to make the advances if they so desire.
I am [etc.]