893.51/6374
The Ambassador in the United Kingdom (
Bingham
) to the Secretary of
State
No. 3056
London
, May 7, 1937.
[Received May
14.]
Sir: I have the honor to refer to my telegram
No. 270 of May 7, 11 a.m.,65 referring to a meeting of the Executive Council of
the Consortium held on May 6. There is attached hereto a copy of Mr. [Page 589] Lamont’s letter to the Embassy
on this subject, with its enclosure. In discussing this matter with Mr.
Lamont, he said he had very little to add except that Count Kano, the
Japanese representative, read a memorandum66 which was surprisingly frank and came out
with the statement that there will be an endeavor by banking and
industrial interests in Japan to curb the militarists. The memorandum
then referred to the Consortium and said the Japanese group would favor
a continuance of the Consortium, with the elimination of the obstructive
provisions. In the subsequent discussion, Mr. Lamont said that to leave
the shell of the old Consortium retaining only the political provisions,
when the very name of Consortium was obnoxious to China, seemed to him
of doubtful wisdom. Later Count Kano said he agreed with this and
considered that probably a fresh start would be more advisable. However
he also added that the Japanese Government was on the verge of
concluding a treaty with China which might have made the existing
Consortium all right. Mr. Lamont said he pressed him somewhat on this
vague statement and considered that Count Kano realized he had
overstepped the mark and rapidly withdrew from the inference he had
given concerning an early treaty between Japan and China. Count Kano
then said that Ambassador Yoshida was very anxious to see Mr. Lamont,
with the result that a meeting was arranged for that afternoon.
Mr. Lamont discussed the possibility of a new Association with Ambassador
Yoshida and asked as regards this British suggestion what would be the
attitude of the Japanese Government. At first Ambassador Yoshida said he
felt his Government would interpose objections because they were very
anxious for international cooperation as regards China, and particularly
desirous that anything that had been accomplished should not be undone.
Mr. Lamont said he could not believe the Japanese Government was more
anxious for international cooperation than was the United States
Government, and he specifically said to Ambassador Yoshida: Would you
not from a political angle, since the Consortium is particularly
obnoxious to China, feel it more advisable to wipe it out and start
again? Ambassador Yoshida replied: Yes, I feel the Japanese Government
would agree on the whole if the State Department approved such a new,
loose-knit Association as was proposed. Mr. Lamont said he then very
clearly expressed to Ambassador Yoshida the hope that, if his Government
did interpose any statement in regard to the British suggestion,
Japanese assent to the wiping-out of the present Consortium would not be
given on condition that a new Association be formed [Page 590] since any such point of view of the
Japanese Government would rapidly leak out and the Chinese would say
this new Association is merely the old obnoxious Consortium under a new
name. Yoshida replied he very clearly saw that point of view and would
give expression of it to his Government.
In conclusion, Mr. Lamont stated that he was surprised at the frankness
of the memorandum which Count Kano read before the Executive Council of
the Consortium meeting in that he twice cracked the Japanese militarists
and that Count Kano was agreeable that copies of this memorandum should
later be distributed to members of the Executive Council. When Mr.
Lamont receives a copy of this he agreed to furnish one to the
Embassy.
Respectfully yours,
For the Ambassador:
Ray
Atherton
Counselor of
Embassy
[Enclosure]
Mr. Thomas W.
Lamont to the Counselor of Embassy in the United
Kingdom (
Atherton
)
Dear Mr. Atherton: Referring to my
memorandum of May 5th, the substance of which I understand you have
transmitted to Washington, I may add that the Executive Council of
the Consortium held a meeting this morning at the offices of the
Hongkong and Shanghai Banking Corporation, Sir Charles Addis in the
Chair.
The programme alluded to in the latter part of my memorandum to the
effect that pending discussion among our Governments as to the
advisability of dissolving the Corporation, the three other groups
would make no objection to the British group proceeding in the
matter of the Canton–Meihsien Railway was followed through, namely,
that the representatives of the three groups agreed to recommend to
their respective groups the waiving of technicalities in regard to
the matter of the Canton–Meihsien Railway.
After the adjournment of the Council, I read to the individual
delegates present, Mr. St. Pierre, representing the French group,
Count Kano the Japanese group, Sir Charles Addis the British group
and myself the American group, my letter to Sir Charles Addis, of
which I attach copy. This was purely for the purpose of gaining from
these delegates an informal and personal expression as to how they
would view the formation of a new Association in the event that the
old Consortium were to be dissolved. I made it especially clear that
this was a purely preliminary exploration; that if any political
advantage were to be gained by the complete liquidation of the old
[Page 591] Consortium it could be
gained only by making a complete cut-off and that the actual
formation of a new Association should rest in the background for the
time being. All the delegates present concurred very cordially in
the idea of an attempt for further cooperation and in my statement
that however no action should be taken pending a decision as to the
dissolution of the existing Consortium. I see no great difficulty
however in the future organisation of some such body as I have
roughly indicated. Sir Charles Addis will study the matter further
and in due course of time will give me his further views. In
principle he welcomes the idea strongly.
You may perhaps wish to forward this report to the Department by post
at your convenience.
Sincerely yours,
[Subenclosure]
Mr. Thomas W.
Lamont to Sir Charles
Addis
Dear Sir Charles: The suggestion which I
made to you orally in our conversation yesterday, with Mr. Whigham
present, was roughly to the following effect:
- (a)
- That following closely upon the dissolution of the China
Consortium—assuming that such dissolution is inevitable in
the not distant future—the four banking groups now making up
the Consortium should consider the organisation of a loosely
knit Association for the purpose of preserving, so far as
possible, the existing principle of international
cooperation;
- (b)
- While it would be unnecessary for such new Association to
be bound too rigidly by a fixed constitution or by-laws, it
would be important for our initial statement to make clear
that the basis for the new organisation should be primarily
the continuing value of cooperation in far-Eastern matters,
so far as it could be attained by the business interests of
the four countries concerned, with the general approval of
their respective Governments.
- (c)
- The procedure of the Association would be as frequent
interchange of views among the groups as was feasible,
covering the status and development of important matters in
China with reference particularly to industrial and
administrative matters;
- (d)
- Without binding any one member of the group to offer a
participation in any concrete piece of business,
nevertheless it should be understood that each group would
endeavour, so far as it lay within its power, to offer
participations to the other groups in any ad hoc proposition or financial operation that
might come before the originating group. In the same way,
each group would purpose within its means to accept such
participations as might be offered to it in any piece of
business from any one of the other groups;
- (e)
- For the purpose of facilitating the objects of the
Association an executive council might be formed with the
understanding that it [Page 592] should meet not less than once a year in
the City of London at the call or request of any one of the
groups;
- (f)
- To membership of this proposed Association, Belgium and
Germany might be invited.
The foregoing is very simple, very rough, and indicates how loosely
knit such an Association should be. To my mind the more loosely knit
it is, consistent with its definite existence, the better. As I said
to you yesterday, you and I being thoroughly convinced of the value
of continued co-operation in far-Eastern matters, it may well be
that starting afresh in the small way indicated, we might succeed
over a period of time in really rebuilding something substantial yet
unhampered by political considerations in China and by too many
fixed conditions. In the case of America the existing group is
almost completely debarred from offering securities under our
present laws. The chances are that those laws will not change
immediately. On the other hand, it is quite probable that the
existing Managing Committee in America might well succeed in
organising an offering group of first-class Houses that might be
interested in future Chinese business, although not immediately.
I have transmitted through our Embassy here to Washington the gist of
my suggestion to you for the purpose of their comment. Meanwhile I
shall be glad to have your own valued views.
Sincerely yours,
