893.51/2587: Telegram
The Ambassador in Japan (Morris) to the Secretary of State
[Received 6.55 p.m.]
Your November 29, 1 p.m.61 reached me on December 3rd and the following day I communicated orally to the Minister for Foreign Affairs the information contained in your telegram and stated that our Government would not lend its support to the proposal of the Pacific Development Company unless it should prove impossible to avert the impending crisis in China by the joint action which the British Government has suggested. Since then I have had no further information in regard to this loan though newspaper reports from Peking indicate that the contract is in process of being carried out. These reports have apparently been confirmed by the Japanese Foreign Office which forwarded to me yesterday the following memorandum:
“The Department of Foreign Affairs present their compliments to His Excellency the American Ambassador and have the honor to recall to His Excellency’s recollection that on the 4th instant he took occasion to inform the Minister for Foreign Affairs, as in obedience to instructions from his Government, that a contract for a loan of $25,000,000 has been concluded between the Government of China and the Pacific Development Corporation of America, $5,000,000 of the amount to be handed over at once to the Chinese Government, and the remaining $20,000,000 to be delivered later, but that the American Government had refused approval to the contract.
According to information subsequently reaching the Imperial Government, the amount of the first part payment of the loan in question by the Pacific Development Corporation was $5,500,000, which has already been handed over to the Chinese Government in America, the latter to receive another $5,000,000 in January 1920, and the remainder of the loan in the following four months. If this information be correctly founded, the Japanese Government, in view of the priority possessed by the present loan consortium in political loans, and of the loan negotiations pending between the American group and the consortium, as well as of the policy of concord and cooperation among the powers concerned in regard to the question of financial aid to China, will feel called upon to consider the steps which may be judged necessary to be taken. In these circumstances, the Japanese Government will be exceedingly glad to learn from His Excellency the American Ambassador whether there be any point at variance with fact in the aforementioned information in their hands.
In the event of the Pacific Development Corporation loan contract being, after all, actually carried into execution, the Japanese Government [Page 551] will, nevertheless, rest persuaded, on the strength of the aforementioned information received from the American Ambassador, that this does not mean that the American Government has given its approval to the loan. At the same time the Japanese Government are keenly desirous to be informed of what steps the American Government intends to take with regard to the loan, thus carried into actual execution without its approval. Tokyo December 19th, 1919.”
I shall await further information and instructions from you before replying to this memorandum.