894.51 So 8/1a: Telegram

The Secretary of State to the Ambassador in Japan (MacVeagh)


84. Department has received an informal inquiry from Mr. Thomas W. Lamont as to whether any objection would be made to loan by American bankers of $30,000,000 to the South Manchuria Railway, the loan to be guaranteed by the Japanese Government. To pass such a loan would apparently involve reversing previous decisions made here in the same matter,52 and we seriously doubt whether it is advisable to do so. The political inference which might be drawn from our action is the principal difficulty. The Chinese would very likely conclude, should we permit the loan to go through, that the American Government has lined up behind Japan in her penetration of South Manchuria and exploitation of that country. An intimation to this effect has already been received from Peking. The Department is anxious to receive your personal and confidential opinion as to what reaction may be expected from the Japanese Government should the loan be refused. You will, of course, not communicate regarding this matter to the Japanese Government or anyone else. The Department wishes as complete a statement as possible of your views not later than Monday, November 21. From our records it appears that the Japanese Government has been fully acquainted with our previous attitude. It will be useful to the Department to receive any information in your possession with respect to Mr. Lamont’s conversations regarding this matter while he was in Tokyo.