Memorandum of Conversation, by the Chief of the Division of Far Eastern Affairs (Hornbeck)

Mr. Lamont telephoned from New York and, after referring to the Department’s letter of February 12 to which was attached for Mr. Lamont’s strictly confidential information a copy of telegram No. 57 of February 10, from our Embassy at London, said that he was “surprised at the extent to which the British Foreign Office had gone” in setting forth its views on the China Consortium. Mr. Lamont also said that it would appear that the Foreign Office had acted prior to the receipt by the British Group of “the American Group’s letter in [Page 571] which was set forth the idea of associate membership in a revised consortium.” Mr. Lamont also said that Sir Charles Addis apparently had in mind some sort of a plan for a new consortium. I told Mr. Lamont that this was news to the Department, as hitherto we were not aware that Sir Charles had suggested the creation of a new consortium and that, although we recalled the suggestion of “associate membership”, as orally made known to us by Mr. Simpson37 we were under the impression that the suggestion had been withheld. Mr. Lamont said that, upon further recollection, that suggestion had not been communicated to the British in writing; that it was, however, mentioned in one of New York’s oral discussions of the situation with London (presumably with Morgan Grenfell and Company, Limited) or in a personal letter.

I told Mr. Lamont that under existing conditions it seemed likely that, upon the receipt of the full text of the Foreign Office memorandum, the Department would wish to make reply promptly to the effect that we would, although with regret, give assent to the British proposal that the Consortium be dissolved. I said that thereafter the mechanics of the procedure would be handled by the member Groups. Mr. Lamont indicated his complete agreement with this viewpoint and estimate of the situation and added that, although he was leaving today for Bermuda, Mr. Simpson would be available and that in any event he (Mr. Lamont) could be reached at Bermuda by means of a long distance telephone call.

At this point I repeated the view which I had previously expressed to Mr. Lamont to the effect that it would seem highly desirable that the American Group avoid any step which might afford even a slight basis for attribution to either the American Group or the American Government of any responsibility for causing a dissolution of the China Consortium. Mr. Lamont said that he was in thorough agreement with such a view.

In conclusion I expressed the hope that Mr. Lamont would have a thoroughly pleasant voyage to and from, as well as sojourn in, Bermuda.

S[tanley] K. H[ornbeck]
  1. Malcolm D. Simpson, secretary of the American Group of the China Consortium.