893.51/2533
The British Appointed Ambassador (Grey) to the Secretary of State
Sir: With reference to my conversation with Mr. Phillips on November 1st on the subject of loans to China, I have the honour to [Page 534] convey to you an expression of the satisfaction of His Majesty’s Principal Secretary of State for Foreign Affairs that the independent loan by the Chicago Bank has been abandoned and that the United States Government are prepared to adopt the proposal put forward by His Majesty’s Government for an immediate advance by the Four Powers without prejudice.
Lord Curzon34 is instructing His Majesty’s Representatives at Tokyo and Paris to bring to the notice of the Japanese and French Governments respectively the proposal for a £5,000,000 loan on the terms which were communicated informally early in October to the Counsellor of the United States Embassy in London, viz. that the United States, Japanese, French and British Groups should, with the official support of their respective Governments make a small loan to China as soon as possible without prejudice to discussions which were proceeding at the time respecting the exclusion of specific areas from the scope of the Consortium or to conditions which might be attached to future loans.
The loan which should be applied solely to meet the urgent needs of China, should not exceed £5,000,000 and should be secured on the rock salt revenue. It should be conditional on the immediate resumption of negotiations between the North and South and on the disbandment of a large number of unnecessary troops including those raised for the purpose of an expedition into Mongolia and of war participation in general. The application of the proceeds of the loan, as well as the question of disbandment to be under the expert control of the Four Groups and Governments.
I am directed to express the hope that you will instruct the United States Representatives in Paris and Tokyo to support these proposals.
With regard to the transfer of the negotiations to New York, the subject is one which seems to concern the Groups rather than the Governments and Lord Curzon is consulting the British Group in the matter.
I have [etc.]
- British Secretary of State for Foreign Affairs.↩