893.51/2507: Telegram
The Ambassador in Great Britain (Davis) to the Secretary of State
[Received October 30, 4.20 a.m.]
3318. Memorandum, based on your 6114, October 22nd, 5 p.m., regarding short term loan to Chinese Government, handed to Foreign [Page 530] Office on 25th instant and, together with your 6121,28 discussed at length on 27th. Lord Grey’s29 telegraphic explanation of his misunderstanding of conversation with the Secretary did not appear entirely clear. Foreign Office fears that action of the Chicago Bank may cause Japan to renew efforts to extend separate financial assistance to China on the ground that American institutions have done precisely what Japan has been requested not to do and has therefore telegraphed Embassy at Washington in this sense. In this connection, Foreign Office intended that [its] suggestions transmitted in our 3161 of October 2nd,30 noon, should contemplate an immediate advance not to exceed £5,000,000 sterling by the interested powers. As present discussions regarding reservations [omission] and now fears lest inclusion of this suggestion, in connection with the third alternative set forth in said telegram, may have occasioned some ambiguity. The proposal as telegraphed, however, had been previously read to and approved by Foreign Office. The Foreign Office moreover is willing to renew endeavors to induce Japan to enter consortium without reservations and having so advised the Embassy at Washington awaits reply from Lord Grey before renewing efforts here and in Tokyo. This method of procedure still appears to be connected with Lord Grey’s impression that negotiations are to be carried on in Washington as well although such is not our understanding.
I am to-day informed that Sir John Jordan’s31 latest despatch, just received, confirms our views as to the urgency of the Chinese financial situation.