893.51/3614: Telegram

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

322. Following from American Group for information of yourself and Stevens:

“American Group after communication with British, French and Japanese Groups, and with knowledge of Department, issued December 5 a brief memorandum as to the organization and aims of the Chinese Consortium for the purpose of attempting to meet the many inaccurate statements that have of late been made as to the Consortium both in China and other quarters. At the end of this memorandum a summary of Consortium principles is set forth as follows: ‘1. The Consortium was organized not primarily as an enterprise for profit, but as a measure of cooperation with and support for, the larger policies of benefit for China, as proposed by the various Governments. 2. The Consortium desires no monopoly of enterprise in China and in fact declines to consider any loans except such as the federal or provincial governments may require for constructive purposes. 3. The Consortium seeks no financial control. If it is to offer Chinese securities to investors, it desires only that proper machinery be provided for safeguarding the security and the expenditure of any loan proceeds. 4. The Consortium [Page 374] would welcome such developments in China as would enable that country to secure wholly from domestic bankers and investors the funds that it so sorely requires for the building up of its means of communication, and for the construction of such other public works as will serve to prevent the disastrous floods, droughts and famines with which China has been from time to time afflicted. 5. The members of the Consortium have, as stated, a great faith in the capacity and character of the Chinese people. They have firm belief in the future of that people. Having had brought to their attention by their respective Governments the grave international dangers that might be incurred from a continuance of the old conditions in China, the several national groups have lent themselves to the plans of their respective Governments in thesincere desire to serve the Chinese people and to contribute to more stable economic and financial conditions in the Far East. 6. The national groups composing the Consortium continue to be of the opinion that the interests of the Chinese people can, in existing circumstances, best be served by the cooperative action of such banking groups, representing the investment interests of their respective countries; and the groups are ready to do their utmost to carry out the original idea of such cooperative effort. Nevertheless, having as stated been organized originally at the instance of the several governments, the Consortium would of course, upon notice from such governments that its services were no longer required, be prepared to arrange for immediate dissolution, thus avoiding further outlays and continuing heavy responsibility. [’]”