861.77/1534: Telegram

The Secretary of State to the Ambassador in Great Britain (Davis)

551. The Department is much gratified by the results of your conversations regarding the Chinese Eastern Railway as reported [Page 694] in your 836, May 22, 1 p.m., and fully approves the principles of action set forth in heading 1.

As to heading 2, this Government feels that it is doubtless a practical necessity under the present circumstances to allow joint Japanese and Chinese military protection of the line: but in view of the fact that Japanese forces have been placed upon the Chinese Eastern in disregard of the allocation of that line to Chinese protection by agreement of the Allied commanders at Vladivostok in April, 1919, this Government considers that in assenting to Japanese participation therein it should be emphasized that this irregular situation is tolerated only as a temporary expedient in view of an apparent military exigency.

With regard to headings 3, 4, this Government, while disposed to consider that financing by the consortium would be satisfactory in principle, apprehends the possibility that such a suggestion might be misconstrued by Japan. In view of this and of the possible difficulty of floating a loan for the purpose it is suggested that consideration of the question be postponed until Lamont can be consulted.

The concurrence between the British and our own views on the essential questions in reference to the Chinese Eastern Railway problem seems to warrant the hope that in spite of the reservation in respect to financing it may now be possible for the British Government to proceed as suggested to obtain general acceptance of the course proposed.

In communicating the above informally to the Foreign Office please ascertain whether French Government has been approached in the same sense.