File No. 893.51/1738
Ambassador Guthrie to the Secretary of State
Tokyo, January 27, 1917, noon.
Yesterday at a luncheon given by Barons Goto, Shibusawa and Sakatani, Japanese Minister for Foreign Affairs asked me privately what I thought of his address to the Diet14 saying that it represented the sincere policy of the cabinet toward the United States and China. He said that he had been asked from London to consent to the reentry of the United States into the international financial group in China and had answered that he had no objection but that the operations of the group should be confined to political loans for administrative purposes strictly and that he thought the Government of the United States should back its nationals. He asked me whether this would be accepted. I told him I had no instructions but pointed out that our administration objected to the group on the ground that it infringed China’s sovereignty and freedom of action and that there was public criticism because of the restrictions of participation to a limited group of financiers. He said that he understood this and that there was some trouble in England on the latter point. He repeated that he had no objection to the United States reentering the international group for political loans as stated but what he desired was to promote cooperation between American and Japanese financial and business interests in loan for the industrial development of China, and that he was ready to give active support to such a movement. It would be understood, however, that such joint operations should be for business purposes only and that no political advantage would be sought by Japan through them. He expressed the opinion that such cooperation would strengthen the friendly relations between Japan and the United States, allay suspicion in China and aid in her development. All this was predicated on the understanding that Japan claims special rights in Manchuria and Eastern Inner Mongolia which she does not waive. I told him I would cable for instructions. It is apparent that the policy of the Cabinet toward China will be much discussed in the approaching campaign.