893.51/6128
Memorandum by the Chief of the Division of Far Eastern Affairs (Hornbeck)
At the close of a conversation which the Chinese Ambassador had initiated in regard to another matter, I took occasion to ask the Ambassador whether he had received anything new regarding negotiations in relation to Hukuang Railway bonds.26 The Ambassador replied that he had not.
I then said that I wanted to make an entirely informal and unofficial inquiry: I merely wanted the Ambassador’s impression: what is the thought and feeling of Chinese officialdom nowadays in regard to [Page 473] the China Consortium: do the Chinese still view the Consortium with antipathy: what would be their feeling if it were to go out of existence. I said that this must be regarded as an inquiry just between myself and the Ambassador and that his reply would be simply for the purpose of orienting me with regard to current Chinese thought. The Ambassador replied that he had not given this subject much consideration; that in the early days the Chinese had felt objection to the Consortium because of the restrictions which it tended to impose on their freedom of action in regard to borrowing; they had gradually come to look upon it as a negative instrument; in later years it had seemed to them an obstacle to any borrowing on their part—because the Japanese, being in the Consortium, always imposed some kind of a veto; but that, with regard to what they might think of a disappearance of the Consortium, he felt that such a disappearance at this time would have an upsetting and harmful effect on China’s interests and he believed that many other Chinese would feel the same way about it.