893.51/6526
Memorandum of Conversation, by the Adviser on Political Relations (Hornbeck)8
Sir John Pratt9 lunched with me today. In the course of the conversation I brought up, among other things, the subject of the China Consortium. I inquired what had been the latest developments in connection with that subject: I said that I knew that Mr. Thomas Lamont had been discussing the matter with representatives of the British group in London last summer, and that I knew in a general way what had transpired, but that a conversation between myself and Mr. Lamont to which I had been looking forward had not yet taken place and I was not sure just where the matter now stands.
Sir John said that the British Government had put out to the French and the Japanese Governments inquiries similar to that which they had made to the American Government, and that they were still awaiting replies from the French and the Japanese. He indicated that the whole subject is in suspense.
I said that up to the time when we received the British Government’s inquiry we had held the view that there was potential advantage to be had in the Consortium’s remaining alive even though dormant, inasmuch as the underlying principle seemed sound and the Consortium [Page 625] itself might some day prove of value. I said that there were, of course, very few people in the United States who gave the matter very much thought; that the present Administration had never had occasion to give it wide and deep consideration, but that in the Department of State there still prevails a favorable attitude, that our view had been given a general blessing, and that some, at least, of us would view the passing of the Consortium with regret. Sir John replied that he was convinced that in order to get forward with the making of loans to the Chinese it would be necessary to let the Consortium go by the board. He said that the Chinese remain strongly opposed to the Consortium principle and absolutely refuse to accept the Consortium as an agency. Therefore, when there had come a chance to make a loan for railway construction, the British Government had felt that it was advisable to clear the way for doing so.
In another connection Sir John said that all matters of constructive effort with regard to a liberal program in regard to China had been put by the Japanese-Chinese hostilities into a state of suspension.
I gathered from what Sir John said that he had had a good deal to do, in the Foreign Office, in connection with the subject of the Consortium, and that the view which he had expressed to me and the official Foreign Office view were identical.