File No. 793.94/308.

[Untitled]

At the conference of April 19 no progress was made as the Japanese withheld agreement on Manchuria and the Chinese refused to commit themselves on Group V or make further concessions respecting the Hanyehping Company.

As the negotiations had thus come to a deadlock it was necessary for the Japanese Government to decide whether to accept the liberal concessions made by China or to attempt to create a new basis of action. As both of the conferences were prorogued at the request of Japan it is evident that an important decision is impending based upon the situation here and taking into account the attitude of the Powers.

Reinsch.