894.51 So 8/1: Telegram
The Chargé in China (Mayer) to the Secretary of State
[Received November 19—9:40 a.m.]
1008. 1. Yesterday General Dzau of Chang Tso-lin’s49 headquarters called. His visit was principally to learn whether I knew the object of the recent trip to Japan by Thomas W. Lamont.50 General Dzau stated that there were current reports that the purpose of the visit was to negotiate a loan to Japanese interests for use in developing Manchuria. He told me that American capital seeking proper investment in Manchuria would be more than welcome by Chang Tso-lin and that Chang would afford it every possible facility. There was no general discussion of the matter between General Dzau and myself. I did not comment on the possible advantage which would accrue to the Chinese from the use by the Japanese in Manchuria of American funds, indirect or otherwise, with creditor control which might be exercised by us, the only kind of effective pressure which might likely be used by the United States should Japanese activities in Manchuria take a turn which we would consider unfavorable to our own as well as to Chinese interests.
2. The commander in chief of the Asiatic Fleet51 has just telegraphed me that among local Kuomintang leaders, presumably in Shanghai, there is a feeling that American bankers, as a result of Lamont’s recent trip to Japan, will extend a loan to certain Japanese banks and that these banks in turn will advance funds to the South Manchuria Railway. The feeling is that such loans would enable Japan to increase her activities and strengthen her grip in Manchuria and that the United States would thus unconsciously help Japan to extend her influence in the internal affairs of China and would give evidence of a change from the past friendly American attitude toward China.
[Page 483]3. Please give me as complete information as possible regarding the visit of Mr. Lamont to Japan. Instructions are also desired as to what reply, if any, the Department wishes me to make to the inquiry of General Dzau.
4. This telegram repeated to Embassy in Tokyo.