893.51/2738: Telegram
The Ambassador in Japan (Morris) to the Secretary of State
[Received March 28—6:16 a.m.]
124. From Lamont for the information of the Department and to be transmitted American group:
“I am starting March 27 for Shanghai meeting Wiggin91 there, thence Peking about April 10. Address cables Legation Peking. Banking group and leading members Government assure myself as well as Ambassador that Japan will now enter consortium without reservations. This will be evidenced by exchange of letters as follows:
[Drafts of letters not printed; they are practically identical with the letters actually exchanged under date of May 11, printed on pages 555 and 556, except that the Kaiyuan-Kirin Railway was omitted from item (3) of the draft of the letter of the American group as received in this telegram.]
Department will have informed you of its disapproval [of] original proposed form of an acknowledgment and of its reasons for desiring us [to] confine our letter to specific statement as to railways, Department in its reply to Japanese Government having covered general points in manner that should prove satisfactory to Japan. New proposed interchange of group notes cannot take place until next week after formal Cabinet and Council meetings and perhaps further routine exchanges between Governments. Am advised that for me to wait further means simply waste of time already growing [Page 520] short. Am therefore, putting interchange of letters in Ambassador’s hands and leaving Egan for few days on details of announcement. Of course the Japanese Government may delay their final action indefinitely or introduce some new element into the negotiations but if it does so after the assurances I have received we do not want a Japanese partnership. Referring new list of railways in our proposed letter you will note we insist upon inclusion in consortium of only Taonanfu to Jehol and thence to coast railway. New British Foreign Office note to the Japanese Government, however, specifies inclusion of all three railroads west of South Manchurian line mentioned in paragraph 3 of list in Japanese note of March 2d.92 Please communicate promptly with Addis also Simon93 urging Addis waive point on the two roads in question. By so doing consortium yields nothing substantial in my judgment and makes Japanese Government situation less difficult to deal [with]. Please give London, Paris replies on this point, which I earnestly hope will be acquiesced in, to Department for prompt transmission to Ambassador here. Details of your March 15th unnumbered duly noted and copy emergency loan contract received.94 Inasmuch as said loan was first proposed by London to meet emergency caused by delay in formation of consortium, therefore if Japan now enters, such emergency will have disappeared and I anticipate upon arrival at Peking that I may judge that consummation [of] emergency loan is inadvisable and that instead I should, as repeatedly urged by American group committee, discuss more comprehensive rather than emergency measures.
On this point Japanese group has at my request furnished me with its tentative suggestions which I shall soon forward through Department for your comment, also that of London, Paris, all to be sent to me at Peking. In no event should I expect to execute any comprehensive loan contract at Peking; merely to discuss, and of course I may find requirements such as to make emergency loan necessary.
Hukuang coupons. Peking reply still unsatisfactory. Suggest you cable me what is joint minimum requirement you and British group can both agree upon. Your present views being somewhat divergent makes it puzzling to deal with. After you jointly agree on formula let me know it and I will then try to put it through in person at Peking.
If Japan enters consortium believe Ave should have meeting of all groups at New York (early July) or late September. Suggest you sound London, Paris on this but chief object [of] this cable is to post you and urge prompt London, Paris acquiescence in railway arrangement with Japanese group.
Last general message I received from you telling families etc. was received March 11th, 8 a.m. You remember you were to send me weekly general cable notifying of health of families etc. Also kindly acknowledge receipt my numbers and number your cables as requested.”