File No. 893.51/2038a
The Secretary of State to the Ambassador in Japan ( Morris)2
I have to-day handed to the representatives of Japan, Great Britain, France, and China copies of an identic note and memorandum setting forth in full the purposes of this Government in its proposal, [Page 197] made in July last, to form an international group for rendering financial assistance to China. You may so state, informally, to the Foreign Office.
It is my desire to center the further negotiations in Washington and the memorandum above referred to has accordingly been made responsive to the various communications received from the several governments including the memorandum from the Japanese Government transmitted in your telegram of August 26, 8 p.m.
The following summary is for your information and for future reference:
1. It is proposed that a new international group be organized consisting of representative national groups of the United States, Japan, Great Britain and France. The plan does not necessarily imply dissolution of former consortium, but formation of new national groups each so comprehensive as to include members of former groups as well as others whose participation may be desirable.
This Government had in mind no specific loan but rather a general plan for dealing with future loans. It will, however, recommend the American group to join in the supplementary reorganization loan for currency reform, if desired, and to carry for the time being in conjunction with the Japanese group the shares of the British and French groups in this and future loans.
2. “Relinquishment of all options” applied primarily to American group alone and was condition of membership in the group. Each government must make its own arrangements with its national group, but similar relinquishment of options is considered reasonable and essential to any cooperative plan of financial assistance to China.
3. Industrial as well as administrative loans should be included in the new arrangement, since both classes should be safeguarded against unsound speculation and destructive competition. No charge of discrimination could be made if the membership in the new national groups be broadened to include all interested parties of good standing; and each government should by common consent, withhold support from any others without previous agreement.
4. The reference to “terms and conditions of loans” applied only to future activities of American group. It was not implied that foreign control of collection of revenues pledged by mutual consent was necessarily objectionable, nor the appointment of advisers for specific purposes such as currency reform.
5. The inclusion of Russian and Belgian national groups seems impracticable under present conditions and is reserved for future consideration without prejudice to any existing rights or to any just claims to such participation.
Repeat to Peking.
- The same, mutatis mutandis, on the same date, to be repeated to the Minister in China, and to the Ambassador in Great Britain (No. 1878) to be repeated to the Ambassador in France (No. 5848).↩