Foreign Relations of the United States Diplomatic Papers, 1937, The Far East, Volume IV

893.51/6414

The Secretary of State to the Ambassador in the United Kingdom (Bingham)

No. 1870

Washington, July 27, 1937.

Sir: With reference to previous correspondence in regard to the China Consortium, and in particular to the Department’s telegram No. 82 of March 12, 6 p.m., there are enclosed⁸⁹ for the information and guidance of the Embassy a copy of a memorandum of conversation, under date June 29, 1937, between Mr. Thomas W. Lamont and an officer of the Department, and a copy of a letter of June 29, 1937, together with the enclosures thereto, addressed to an officer of the Department by Mr. Malcolm D. Simpson of J. P. Morgan and Company.

The Embassy will note from a reading of the enclosures that the possibility is suggested that the British have misunderstood the position of the Department with regard to the proposed dissolution of the China Consortium. Although the Department stated its position clearly in the memorandum which the Embassy presented to the British Foreign Office on March 15, 1937, and the Department considers it improbable that the British Foreign Office has misunderstood our position, the Embassy is authorized, if it feels that an explanation would be helpful, to inform the British Foreign Office, orally and informally, that the Department’s statement in its memorandum under reference, to the effect that this Government would interpose no objection to participation by the American Group of the Consortium in negotiations for the proposed dissolution of the Consortium, was not and is not conditioned upon there being kept in being cooperation among the parties concerned. It is felt that the Embassy would be warranted in explaining to the British Foreign Office that, although the Department regards the China Consortium as a private association of bankers and has laid down no condition for its dissolution, it would view with regret a return to the situation and practices which prevailed before the Consortium Agreement was concluded, and it has expressed the hope, reciprocating the expression of that hope by the British Government, that the major objects of the Consortium Agreement may be obtained by keeping in being the spirit of cooperation by and among the governments concerned on which the Consortium is based.⁹⁰

Very truly yours,

For the Secretary of State:

Sumner Welles

89. Enclosures Not printed.
90. The Embassy reported on September 23 that the instruction had been carried out but no indication was given by the Foreign Office that the position taken by the United States had been misinterpreted.