893.51/4164: Telegram
The Secretary of State to the Ambassador in Great Britain ( Harvey )
49. Department’s telegram No. 221 [22] February 3, 6 p.m.41
Please advise Wellesley that discussions with Japanese Foreign Office have made it clear that the Japanese Government is not prepared to have its group in the Consortium participate in negotiations with the Chinese Government for a funding loan but is willing only that the Japanese group should in common with the American, British and French groups consider and recommend to their respective governments such plans as they may be able to agree upon for [Page 532] a consolidation of Chinese debts: the Governments could then consider authorizing their respective groups to undertake negotiations with China on the basis of such recommendations. It is further the position of the Japanese Government that any consideration of the possibility of a small supplementary loan for specified purposes, over and above what is required for consolidation, should be subsequent to the bankers’ discussion of the question of consolidation.
In view of this position of the Japanese Government it appears that the most feasible course of action is to have Consortium bankers proceed to consider and recommend a concrete proposal for consolidation as suggested by the Japanese Foreign Office.
Even if it should prove impossible to consummate a loan for this purpose before the assembling of the Special Conference, the previous examination of the subject, and particularly the formulation of a concrete and definite plan for dealing with the unsecured debts, would appear to afford a means of obviating the possibility of the Special Conference being drawn into a general discussion of Chinese finances.