The Minister in China (Reinsch) to the Acting Secretary of State
[Received February 2, 11.59 a.m.]
Your January 4, 7 p.m. French Minister has informed me that he has instructions to act with British Minister in urging elimination of the German interest in the Hukuang Railways, also to proceed with the British, Japanese and Italian Minister[s] to urge liquidation of enemy property and other measures against Germans. British Minister has informed him that the British Government desires that matters relating to general German rights are to be reserved for action by Peace Conference, with the exception of repatriation which has already been decreed. As to the Hukuang Railway British Minister does not think that action without the United States is advisable.
British Minister states that he personally favors the immediate settlement of the Hukuang matter by the three powers concerned together with furnishing of funds needed, if the United States of America will advance them. [Omission] formation of the consortium on the conditions named by the American Government can be at once accomplished. He expressed great fear lest Japan by magnifying her legally unfounded claims in Shantung might secure admission to the consortium without fully acceding to the terms proposed by America particularly with regard to railway options in Manchuria. He fears that [with] the admission of Japan to the Hukuang group without such thoroughgoing guarantee, the future railway situation would be very dangerous, expressing views identical with my telegram of January 7, 7 p.m.80 of course like myself [Page 569] applying them not to the American consortium proposal but to possible partial abatement of its terms. He stated he would again strongly urge his Government to push conclusion of consortium. We are both of opinion that the most serious consequences will follow unless Chinese finance can be put on a sound basis without delay.
Referring to my cable of January 11, 1 p.m. [January 24, 7 p.m.?]81 The French Minister also informed me that he had expressed acquiescence in the appointment of a Japanese currency adviser, his Government having obtained from Japan in return support for the eventual appointment of a Frenchman as inspector of the land revenue. I expressed surprise that an attempt should be made to settle such matter at this time without full consultation. Predetermining as to [these] matters would seem neither just to other partners nor in the best interest of all concerned.