893.51/2534
The British Embassy to the Department of State
The British Government agree that the Consortium should be proceeded with and every effort should be made to induce Japan to enter into it without any reservations, and they are prepared to co-operate in this. They would, however, suggest that, should their efforts to get Japan to give up all reservations fail, the other Powers might in the last resort concede a reservation to Japan of Southern Manchuria but not of Eastern Inner Mongolia.
Meanwhile the British Government have urged on the Japanese Government that they should not make independent loans to China, and they point out that if the United States makes an independent loan it may be followed by independent loans from Japan. The British Government would therefore urge that their proposal for a small loan of, say, five million pounds, should be made by the four Powers immediately, without prejudice to the discussions now proceeding for the formation of the Consortium.