893.51/2545: Telegram
The Ambassador in Japan (Morris) to the Secretary of State
[Received November 16, 10.30 a.m.]
Your November 5, 5 p.m. and your November 11, 5 p.m.82 I am convinced, after a careful investigation and on confidential information which I believe to be reliable, that the Japanese bankers are not only in a position to underwrite their proportion of the loan to China, including the shares of Great Britain and France, but that they are keenly eager to see the proposed plan of the consortium carried out and are still exerting their influence to that end.
In my opinion the bankers will encounter no difficulty in floating Japan’s share of the loan and have had no part in suggesting the reservations. The Ministry adopted the reservations under the pressure of the military who, since the Russian war and with the support of a sentimental public opinion, claim a peculiar interest in Manchuria.
I believe that the Japanese Government might possibly be persuaded to abandon the reservation as to Mongolia and would be prepared to consider seriously a definition of the reservation as to Manchuria which would make clear that it was not a territorial reservation or an effort to create an economic sphere of influence but simply a statement of the limits within which lie capitalized interests, existing or capable of being designated, and deemed vital to the safety of Japan.
The framing of such a definition would require considerable negotiation and patience but I am optimistic enough to believe that it is possible. If agreed on it would not only solve the chief difficulty of the consortium but would illustrate in a practical way what we mean by special interests due to geographical propinquity.