893.51/2383
The Department of State to the Japanese Embassy
Memorandum
The Government of the United States is informed that, at the bankers conference held in Paris during May and June last to discuss matters relating to the new consortium for China, the Japanese [Page 472] financial delegates, acting under instructions from their principals, asserted that “all the rights and options held by Japan in the regions of Manchuria and Mongolia where Japan has special interests should be excluded from the arrangements for pooling provided for in the proposed agreement,” because of “the very special relations which Japan enjoys geographically and historically with the regions referred to and which have been recognized by Great Britain, the United States, France and Russia on many occasions.”
The Government of the United States is further informed that the position taken by the representative of the American Group, with the approval of the British and French financial representatives, was that, so far as the banking groups were concerned, any attempt to exclude Mongolia and Manchuria from the scope of the consortium would be inadmissible; but that the whole question raised was one of such grave importance that it was felt to be beyond the immediate competence of the financial groups to discuss, and that he would, therefore, bring the matter to the attention of his Government.
The Imperial Japanese Government has not indicated that it shares the opinion expressed by the Japanese bankers; but inasmuch as the question raised by the latter has been referred to this Government by the American representative, it is felt to be appropriate to bring the matter to the notice of the Imperial Government.
It may be that the Japanese banking group is under a misapprehension as to the objects and purposes of the consortium, which are to make loans to the Central Government of China, or to the provincial governments, for administrative or industrial purposes and to include all such loans as have the guarantee of the Central Government or any of the provincial governments and which involve a public issue. They do not, however, contemplate the elimination of private enterprise or the activities of financial or industrial corporations, nor would it be the desire of this Government that they do so.
The Imperial Japanese Government will readily understand that the Government of the United States could not consistently consent that the American bankers agree to the reservation proposed, for the reason that it is believed to be an essential prerequisite to the proper functioning of the consortium that all Chinese business of the classes proposed as appropriate for the activity of the consortium be available for it. Reservations of regions can only impair its usefulness as an instrument for good, and limitations on its activity can only detract from its utility as a means for promoting international cooperation among those most interested in China. Moreover, as all [Page 473] other parties to the arrangement have agreed to pool their rights and options without other reservation than that contained in the terms of the agreement itself, it is only equitable that the same rule should apply to all alike.
If the Government of Japan is unable to convince the Japanese bankers of the justness of adhering, without reservation, to the agreement as accepted by the bankers representing the groups of the United States, Great Britain and France, the Government of the United States will receive the information with keen disappointment and sincere regret; for it is felt that the relations established during the Great War between these and other nations have laid a basis upon which the work of peace might be erected by cordial cooperation and to their mutual advantage. The Government of the United States believes that the consortium is one of those mediums for constructive work through which the helpful spirit of the relations which were so cemented during the war may be translated into cooperative action. That this view is not held alone by the Government of the United States is evidenced by the desire on the part of the British and the French Government[s] to cooperate in the consortium and by the requests for representation therein from the Government of Belgium, and from the bank of Russia, both of which are now under consideration. It is, therefore, the confident hope of this Government that the Imperial Japanese Government will also share this view, and will so inform the Japanese banking group.