893.51/2916: Telegram

The Minister in China (Crane) to the Secretary of State

216. Your July 29, 8 p.m. Subsequent to the delivery to the Chinese Foreign Office of the American note (Legation’s July 11, midnight [noon]73), a draft joint note was proposed by the British Chargé d’Affaires under instructions from his Government to the Chinese Foreign Office. This may be roughly divided into four parts: [Page 563]

Introductory preamble based on Lansing note of October, 1918.74
A reference to the meeting held in Paris by the group representatives on May 11, 1919.

“A draft arrangement between the groups was then drawn up embodying a basis of the principles of the American proposals. While it is not the intention of the present note to do more than outline the broad aspects of the question or to enter into financial details which await confirmation by the groups at the forthcoming inter group meeting to be held in New York City in October next, we consider it advisable to make the position clear in regard to an essential point which might otherwise give rise to misapprehension, namely amount of support to be given by the respective Governments [to] their national group or to the consortium as a whole.

It is to be understood that the Governments of each of the four participating groups undertake to give their complete support to their respective national group members of the consortium in operations undertaken pursuant to the inter group arrangement entered into by the bankers at Paris, which arrangement in turn related to existing and future loan agreements involving the issue for subscription by the public of loans having a Chinese Government guarantee subject to the proviso that existing agreements for industrial undertakings upon which substantial progress had been made may be omitted from the scope of the arrangement.”

A reference to the Japanese position.

“In the course of the negotiations following on the United States Government proposal, the Japanese Government drew the attention of the Governments concerned to the special position in which the former found themselves owing to Japan’s geographical propinquity to China, having specially in view the fact that the two countries shared a common frontier along northern boundary of Korea. The Japanese Government pointed out that the activities of the new consortium could not fail to have an important bearing on questions affecting the national defense and economic existence of Japan.

The other Governments’ special ambassadors informed the Japanese Government in reply that there was no occasion to apprehend, on the part of the consortium, any activities against the economic existence or national defense of Japan.

The letter[s] exchanged between Mr. Lamont and the Japanese group,75 copies of which are already in Your Excellency’s possession, define the position.”

A general expression of good will.

The French, British and American Legations have accepted this proposed draft of the British Chargé d’Affaires, and the Japanese [Page 564] Minister, while stating that it is personally acceptable to him, is awaiting instructions from his Government.

The Legation has received a request from the Chinese Foreign Office for a copy of the Bankers’ Agreement of May 1919 mentioned in the Kajiwara–Lamont notes, copies of which were forwarded by the Legation to the Chinese Foreign Office. Subject to the approval of the Department the Legation will inform the Chinese Foreign Office that their request has been referred to the American group representative.

For the information of the Department, Acting Minister of Finance Pan Fu, in an informal conversation with the American Minister and the American group representative, suggested the reopening of negotiations for the American emergency advances of the five million pounds sterling loan discussed last winter. This fact has become generally known. No action has been taken due to the present chaotic political conditions.

Your July 31, 7 p.m.75 Have informally discussed Hukuang question with present Acting Minister of Finance who feels that he cannot press the matter to conclusion [before] formation of new Cabinet now in progress.

  1. Ante, p. 548.
  2. See note of Oct. 8, 1918, to the French Ambassador, Foreign Relations, 1918, p. 193.
  3. Ante, pp. 555, 556.
  4. Post, p. 653.