893.51/2451: Telegram
The Ambassador in Great Britain (Davis) to the Secretary of State
[Received 7.58 p.m.]
3161. Your 6005 September 26th, 4 p.m. and previous correspondence regarding Chinese consortium. Japanese Ambassador recently returned from Paris has now furnished Foreign Office with territorial definition of reservations as follows:
South Manchuria comprising a territory whose “northern boundary is a line drawn through the point [where] the railroad line from Changchun crosses the lesser Sungari River and east and west paralleling main Siberian railroad.”
Eastern Inner Mongolia a territory difficult to define but” comprising the greater portion of the four (tribal) leagues nearest to Manchuria which leagues are allied and constitute a quasi-independent district of their own.”
In view of the above an informal discussion at Foreign Office now reveals opinions regarding three possible alternatives: (1) exclusion of Japan from consortium; (2) continued pressure to induce Japan to withdraw all reservations; (3) modification of present reservations as outlined below.
The first appears injudicious as it would stimulate independent action by Japan, would free the hands of Japanese banks already coveting the Chinese field, would thereby create a rival to the consortium, would exclude from the guiding influence of the consortium and its pooled interests the existing Japanese concessions for railroads and other activities which arouse the embarrassing question of the disposition of the railroads in Shantung.
The Foreign Office does not appear to attach much importance to the French fear of German collusion with Japanese.
The second alternative, if the previous dilatory tactics of Japan have been correctly construed, would merely serve to prolong a delay which is advantageous only to Japan, would postpone a definite solution and will doubtless invoke most of the objections raised regarding point one.
The Foreign Office would therefore welcome an immediate expression of our opinion regarding the following interpretation and application of the third alternative: That the reservation regarding South Manchuria as above defined be accepted on account of its propinquity to Korea, its clear definition and the existence of recognized railroad and other concessions therein. (The possible advisability of anticipating an invocation by Japan of the Lansing-Ishii agreement [Page 492] in this connection was intimated.) That the reservation regarding Eastern Inner Mongolia should not be accepted owing to its undefined character and to the absence of such special conditions as those pertaining to South Manchuria. That in order to relieve that present financial stringency in China the four powers including Japan immediately advance to China a loan not to exceed five million pounds. The continuance of the present discussions regarding reservations [as] to future loans under the following conditions:
- 1.
- The disbandment of the Chinese troops raised under the War Participation Bureau;
- 2.
- The disbandment of forces now used against Outer Mongolia;
- 3.
- The disbursement of such of the proceeds of such loan as are applicable to the discharge of troops to be carried out under observation of military representatives of participating governments;
- 4.
- The disposal of the balance of the loan to be under strict supervision of participating government[s] under arrangements similar to those made in connection with the reorganization loan;
- 5.
- A solution of the disputes between North and South China.
London believed that South Manchuria is the crux of Japan’s desire and that notwithstanding certain unfulfilled railway concessions alleged to affect Inner Mongolia but actually penetrating the Province of Chihli, the reservation affecting Inner Mongolia will be dropped.
With the understanding that Embassy at Tokyo and Legation at Peking will be informed by the Department in the sense of the above the Foreign Office will similarly advise British Missions in those capitals and will discuss in the same sense with Counsellor of French Embassy here with whom negotiations with French Government are being carried out rather than through Paris but with whom this Embassy has at no time consulted. American Mission and American Embassy Paris informed.