893.51/2697a: Telegram
The Acting Secretary of State to the Ambassador in Japan ( Morris )52
The Department approached the Governments of France, Great Britain, and Japan more than eighteen months ago with the proposal [Page 498] that a new consortium be created with the view of extending financial aid to the Chinese Government. The terms of this proposal were communicated to you at the time and the aims and objects which this Government was hopeful would be gained by it were imparted to you. It was intended more than anything else that the Chinese should receive during this time of transition and when the economic needs were greatest the necessary financial aid in a way which would remove the tendency for the Chinese Government to gravitate politically toward any one power, and would prove to be a practical way of insuring the continued equal economic opportunities and chances for trade which are generally admitted to be necessary to prevent rivalries between nations which would endanger both the interests of the powers themselves and the natural progress of the country. The British and French Governments adopted the suggestions in principle as a substantial basis upon which a new consortium of banking groups in the several countries could be founded to supply needed loans to China. At a meeting held in Paris last May, the agents of the banking groups of France, Great Britain, Japan, and the United States accepted and confirmed these proposals, subject to the approval of their Governments. Both the banking groups and Governments in France and Great Britain and the bankers in Japan were actuated by a liberal and self-denying spirit, each taking an interest in removing as much as they possibly could disturbing and complicating motives from the negotiations which in their opinion should be conducted on the basis of well-founded economic policies.
To our disappointment Japan has shown herself disinclined to work in harmony, being alone in this attitude. Her Government did not inform its financial leaders at the time the proposals were first presented; it later neglected to suggest that they prepare to enter the proposed consortium by forming a financial group until after the lapse of eight months; for nearly a year it neglected to inform the other interested powers as to its feeling in regard to the entire scheme of such a financial combination. It then presented a proposal by which the special rights and interests which Japan claimed in South Manchuria and Eastern Inner Mongolia should not be included in the field of operations of the proposed financial combination, thereby bringing in entirely new issues not only alien to the intention of the proposed consortium but out of harmony with the spirit of liberality and unselfishness which had been a feature of all the exchanges of views regarding the proposal. By this procedure the success of the whole plan depended on whether the other powers interested would agree to grant to Japan a special position as regards rights, preferential and exclusive, which in fact admitted a new principle of spheres of influence in advance of and more extensive than had been [Page 499] recognized in China at any previous time. The other three interested powers made every endeavor to convince Japan that she should recede from her stand, but without success, even after this Government had made the concession that the interests of Japan would not be jeopardized in certain enterprises. You were advised through the Legation at Peking on October 1553 that the Department, on October 11,54 replied to an inquiry from the Government of Great Britain fully explaining its attitude and no change has been made therein.
Considering all this our Government has decided that the time has arrived to go ahead and fully complete the proposed financial combination or to meet the new complication which Japan has created. This condition is fully realized by the American group who have sent Thomas W. Lamont as their agent to Japan. Lamont has no official capacity at all but is making the trip to confer with the bankers’ group in Japan for the purpose of trying to obtain an agreement that will work satisfactorily. Aid him all you can with essential information and otherwise and work with him just as far as you are able to do so. Send complete reports. Instructions will be sent from time to time.
It is still our earnest desire that Japan should cooperate completely and heartily in a way that will give assured safety to her legitimate rights, surrendering nothing which justly is due her. In case, however, that desire can not be realized on account of the action of Japan, we will find it necessary, but with reluctance and the knowledge that we have vainly tried every means we had to secure harmonious action, to revert to the old form of national and individual action in spite of all its disadvantages of competition and conflict, giving our support to every proper financial concern in the United States which should wish to do business on an independent basis in China.
We would be keenly disappointed to find ourselves obliged to give up the hope of working with the Japanese Government in solving questions of basic concern to America and Japan on the basis of common motives and the acceptance by both countries of rules of action embodied in previous undertakings between the two nations and most recently reaffirmed in the notes exchanged between Secretary Lansing and Ambassador Ishii.55
Repeat to the Minister in China for his information.
- See last paragraph for instructions to repeat to Peking. Sent also to the Ambassador in Great Britain, with instructions to repeat to Paris for information only.↩
- Not printed.↩
- Foreign Relations, 1919, vol. i, p. 493.↩
- Ibid., 1917, pp. 264–265.↩