893.51/2695
The Department of State to the Japanese Embassy
Memorandum
The Government of the United States has received and carefully considered the memorandum under date of March 2, 1920, in which the Japanese Ambassador set forth the views of his Government as to the formation of the proposed international Consortium for loans to China; and it is happy to record the hearty gratification with which it has noted the disavowal by Japan of any claim to exclusive economic or political rights with respect to South Manchuria and Eastern Inner Mongolia.
The American Government cannot but acknowledge, however, its grave disappointment that the formula proffered by the Japanese Government is in terms so exceedingly ambiguous and in character so irrevocable that it might be held to indicate a continued desire on the part of the Japanese Government to exclude the American, British and French banking groups from participation in the development, for the benefit of China, of important parts of that Republic,—a construction which could not be reconciled with the principle of the independence and territorial integrity of China.
The Government of the United States is not unsympathetic with the professed objects of the principle embodied in the Japanese formula: it considers, on the other hand, first, that the right of national self preservation is one of universal acceptance in the relations between states, and therefore would not require specific formulation as to its application in any particular instance; and, second, that the recognition of that principle is implicit in the terms of the notes exchanged between Secretary Lansing and Viscount Ishii on November 2, 1917.78 This Government therefore considers that by reason of the particular relationships of understanding thus existing between the United States and Japan, and those which, it is understood, similarly exist between Japan and the other Powers proposed to be associated with it in the Consortium, there would appear to be no occasion to apprehend on the part of the Consortium any activities directed against the economic life or national defense of Japan. It is therefore felt that Japan could with entire assurance rely upon the good faith of the United States and of the other two Powers associated in the Consortium to refuse their countenance to any operation inimical to the vital interests of Japan: and that Japan’s insistence that the other three Powers join with it in the proposed formula as a condition precedent would only create misapprehension. It is felt, moreover, that such a formula would not only be unnecessary, but would [Page 513] lend itself to misconstruction for the reason that it apparently differentiates between the status of South Manchuria and Eastern Inner Mongolia and that of other Chinese territory. The mere fact of differentiation would, it is apprehended, give rise to questions which would tend still further to unsettle the already complex situation in China. This Government is therefore hopeful that the Japanese Government may in view of its several existing relationships of understanding with the United States and the other two Powers be persuaded to rely upon their good faith in this matter and forego its proposal to require explicit guarantees, the mere statement of which opens the way for possible misconstruction and misapprehension in the future.
The Government of the United States has furthermore been happy to note the readiness of the Japanese Government to enumerate the specific vested interests of its nationals, in Manchuria and Mongolia, which it would propose to exclude from the scope of operations of the proposed Consortium; although it finds it difficult to believe that in order to meet the necessities of Japanese economic or political security it is essential for Japan alone to construct and control a railway line of such a character as the one projected from Taonanfu to Jehol and thence to the seacoast.
It is hoped that the discussions now in progress in Tokyo between Mr. Lamont, on behalf of the American Group, and the representatives of the Japanese banking interests may result in such a complete understanding on the question of the specific enterprises in Manchuria and Mongolia, which it may be found mutually satisfactory to exclude from the operation of the Consortium, as would enable the Japanese Government to accord to that understanding its unqualified approval.
In conclusion, the Government of the United States takes pleasure in the fact that the frank interchanges of views which have thus far taken place appear to have resulted in a basis of mutual understanding which justifies the belief that a speedy completion of the organization of the Consortium is now possible.