893.15/22
Memorandum by the Chief of the Division of Far Eastern Affairs (Hornbeck)70
Referring to telephone conversations exchanged between Mr. Thomas W. Lamont and Mr. Hornbeck on June 9 and June 12 and to Mr. Lamont’s letter to Mr. Phillips of June 13, Mr. Lamont’s letter to Mr. Hornbeck of June 13 and Mr. Hornbeck’s letter to Mr. Lamont of June 15,71 on the subject of the China Consortium,—
[Page 394]Mr. Hornbeck made to Mr. Lamont this morning by telephone a statement as follows:
June 18, 1934.
I have talked the matter over with the Secretary and he with the President. They have not hitherto had occasion and have not at this moment undertaken to make any intensive study of the history and the implications of the Consortium project and would not wish to make a commitment or to have the views or opinion of the Administration cited conclusively in any discussions of the matter at this stage. They are not adversely disposed in regard to the Consortium and its possibilities as an agency for cooperative action. The Administration feels that the present would not be an opportune moment for withdrawal by the American banking group. We would prefer to see at this time no change with regard to the life of the Consortium. We are not ready to suggest activity. We feel that we are in a period when the best procedure is not to make alterations in the general set-up. Perhaps the most important of the uncertain factors during the next few months is that of the Naval Conference. When there becomes available more and clearer evidence with regard to what really are Japan’s intention and plan of procedure with regard to China and the Far Eastern situation in general, everybody will be in better position to judge with regard to what seems possible and practicable on the part of other countries. We would not wish to see an organization like the Consortium made an instrument whereby money would be made available from this and other countries only to be made use of ultimately by the Japanese for purposes of essentially exclusive advantage to themselves. Also, we would not desire that the American banking group take the lead in steps intended to bring the Consortium into action. We feel that nothing should be done which would make it appear either to Japan or to China that the United States is leading or wishes to lead in bringing about action by the Consortium; that it would be best to persevere in an attitude of watchful waiting until China invites or appears ready to invite action and Japan or Great Britain takes the lead in suggesting a favorable response by the Consortium.
In brief, with an open mind as regards future developments and possibilities, the attitude of the Administration on the subject of the Consortium is one of good will and watchful optimism.