893.15/22
J. P. Morgan & Co. to the Under Secretary of State (Phillips)
Sir: We beg to acknowledge with thanks receipt of your letter of May 29th enclosing a copy, with translation, of a letter addressed to the American Ambassador at Paris by Mr. Charles Sée, Director of the Syndicat Europeen d’Entreprises,68 regarding the possibility of participation by American interests in public works projects in China. We note the hope expressed in the memorandum that American concerns, supported by the Government of the United States and by American banks, might adopt a policy similar to that of the French Syndicate for the realization of undertakings in China and that such contracts might be carried out and financed by division between the two groups.
We can see the advantage to American export industries in obtaining orders for development enterprises in China, but in addition to the fact that there is no market in this country at the present time for Chinese Government bonds, the provisions of the Banking Act of [Page 393] 193369 have eliminated the banks, composing (as you can see) the great majority of the American Group, from the field of issuing securities.
In fact, we believe that most of the members of the American Group of the Consortium would prefer now, under existing conditions, to see the group disbanded. No formal action has been taken along this line as yet, but because the American Group was originally formed at the request of the Department of State we think it proper to acquaint you with what may prove to be the sentiment of the group. Heretofore the group has been held together in the hope that in due course it could cooperate with the other national groups of the Consortium in financial measures constructive and beneficial to China. We are not at this time asking for any formal expression of view on the part of the Department, but we trust that you may be considering the points involved.
Our Mr. T. W. Lamont is sailing for Europe next week, and it may be that members of the British and French Groups will desire to discuss with him the future of the Consortium and the attitude of the American Group. Pending any such discussion, you will no doubt agree that no useful purpose would be served by any formal conference with Mr. Sée’s correspondent, although it may be possible that Mr. Sée may seek out Mr. Lamont while he is in Paris.
Respectfully,
For the American Group
P. S. Since dictating the foregoing, we are informed by the New York agent of this French Syndicate that owing to the present political uncertainty in France his syndicate would not for the time attempt to pursue its plan of inviting American or other cooperation in the Chinese enterprises it had in mind.