893.51/2503: Telegram
The Ambassador in Japan (Morris) to the Secretary of State
[Received October 28, 7.40 a.m.]
I orally communicated the substance of your October 22, 5 p.m.27 to the Vice Minister of Foreign Affairs. He expressed his personal surprise at the action of our Government in approving the loan, explaining that at the conference of the Allied representatives in Peking there had been a tacit (he would not say agreement, but rather) understanding that no one of the Governments represented would approve the conclusion of any loan to the Government of China without consulting the other Governments interested. He explained further that this particular loan would prove, he feared, a serious embarrassment to the Japanese Foreign Office because since the advent of the present Ministry the Government, in the face of considerable opposition from business interests, had withheld approval of all proposed loans to the Chinese Government which might be used for political ends by the Chinese Government, alleging, as one of the Japanese Government[’s] reasons, the necessity of first reaching some more satisfactory international understanding. He surmised that the action of our Government, when made public, would subject the present Ministry of Japan, and the Foreign Office, to severe criticism in holding back Japanese private enterprise and merely opening the way for American interests to step in.
At the conclusion of the interview he asked for a written statement of the terms of the loan, which I agreed to furnish in a personal note to him.