is to replace the uncontrolled activities of individual enterprise in China by a cooperative organization in which the citizens of the four powers most interested in China will join in a spirit of friendliness which can be such a potent factor for the welfare of China and for the good relations of the four powers concerned. The United States Government has been entirely frank in its professions to the Government of Japan and fully realizes the Government of Japan is cognizant of that fact and well aware that the present situation has developed in spite of the efforts of the United States Government and certainly not because of them. Further the hope can only be expressed that the Government of Japan will in the near future indicate its adherence to the consortium proposals. In that case the United States Government will be in a position to act with some degree of authority over the activity of its citizens in financial matters in China and will be able, it is certainly expected, to direct the loan of the Pacific Development Corporation through the American Group into the Consortium." LANSING 893.51/2591: Telegram The Ambassador in Japan (Morris) to the Secretary of State TOKYO, December 25, 1919, 1 p.m. Supplementing my December 20, 6 p.m. My British colleague informs me that, following further representation made in behalf of his Government on December 20, the Japanese Government today handed him a memorandum dated December 23 which states that the Japanese Government now feels itself in accord with the British Government in view of the fact that the British Government agrees, first, that the disbandment of the Chinese troops should be gradual and, second, that the disbandment of the Southern troops should follow that of the Northern troops. The memorandum further states that the Japanese Government believes that it has made quite clear in previous communications that it is at one with the other powers as to the advisability of the disbandment of unnecessary troops in China. It still maintains however that to prescribe just what troops should be disbanded would constitute an interference in China's domestic affairs. Therefore it would wish to avoid any specific designation and trusts and believes that the British Government is in accord with this view. The Japanese Government therefore, after a careful consideration and after observing that three other powers are already agreed in principle, have decided to agree to disbandment as [a] condition of the urgent emergency loan advocated by the British Government. At the same time it refrains from adhering to the view of the French Government that disbandment should be first charge on the fund, as such a view contrary to the spirit animating the powers in their desire to rescue the Chinese Government in this emergency. MORRIS 893.51/2598a: Telegram The Acting Secretary of State to the Ambassador in France (Wallace) [Extract] WASHINGTON, December 27, 1919, 8 p.m. 9441. French apparently unwilling to proceed with $25,000,000 four power loan to China unless disbandment of certain troops appears as condition precedent. England has agreed with us and we are just advised Japan agrees with England. Please cable why French Government takes this attitude. 893.51/2594: Telegram POLK The Ambassador in Japan (Morris) to the Secretary of State TOKYO, December 28, 1919, 11 a.m. Your December 23, 6 p.m. I delivered in the form of a memorandum to the Minister for Foreign Affairs this afternoon.63 He then told me of the contents of the note which he had delivered to my British colleague and the substance of which I telegraphed the Department in my telegram December 25, 1 p.m. He remarked that perhaps the members of the old consortium would file objections with the Chinese Government to the [garbled group] Pacific Development Company contract, and at the same time the new emergency loan of £5,000,000, as now agreed to, might be offered as a substitute. In regard to the proposed new consortium he told me that he was still endeavoring to find some formula which would protect Japan's vital interests in Manchuria and Mongolia and also meet the views of the other Governments. MORRIS 893.51/2601 The British Chargé (Lindsay) to the Secretary of State No. 917 WASHINGTON, December 31, 1919. SIR: With reference to Lord Grey's note No. 899 of the 20th instant, I have the honour to inform you, by direction of my Government that the Japanese Government now agree with the views of His Majesty's Government as to the gradual nature of the disband Afternoon of Dec. 27; this telegram was apparently drafted on Dec. 27 but not dispatched until the following morning. ment of the superfluous Chinese Troops, also that a commencement with the disbandment of the North and South is to be made a condition of the loan. They still maintain however that the disbandment must not be subject to any foreign control nor do they share the view of the French Government that disbandment should be made a first charge on the proceeds of the loan. I am to add that His Majesty's Government are not prepared to press these two latter points and the French Government are being urged to fall into line. I have [etc.] 893.51/2602: Telegram R. C. LINDSAY The Ambassador in France (Wallace) to the Secretary of State [Extract] PARIS, January 3, 1920, 11 p.m. 15. Your 9441, December 27. I learn at the Foreign Office that the French Government's contention that the disbandment of troops should be a sine qua non to the issuance of the loan has been withdrawn and that it so informed the British Embassy here on December 30th. The French Government, however, will insist that unnecessary troops be disbanded at the earliest possible moment not only by the Northern but also by the Southern factions and proportionally. 893.51/2601 WALLACE The Secretary of State to the British Chargé (Lindsay) WASHINGTON, January 5, 1920. SIR: I have the honor to acknowledge the receipt of your note No. 917 of December 31, 1919, regarding a proposed loan to the Chinese Government. The Department is gratified to learn that the Japanese Government has withdrawn its objection to the loan. In this connection I take pleasure in informing you that I am just in receipt of a telegram from the American Ambassador at Peking [Paris] stating that the French Government has withdrawn its contention that the disbandment of the troops should be a sine qua non to the issuance of the loan. There seems now to be no reason why the proposed advance to China should not be made, and the Department is today informing the American Group to this effect. Accept [etc.] For the Secretary of State: PROPOSED APPOINTMENT OF A JAPANESE FINANCIAL ADVISER TO CHINA 893.51/2095: Telegram The Minister in China (Reinsch) to the Acting Secretary of State PEKING, January 16, 1919, 7 p.m. [Received January 16, 5.51 p.m.] Your telegram January 3, 11 p.m. [January 4, 2 p.m.?]63 The Ministry of Finance has informed me that the final agreement for engaging Sakatani as currency adviser has not been signed, and that in future if it becomes necessary to conclude a currency loan the American Government will be consulted. The Japanese Minister informed me today that Ambassador Ishii had mentioned this matter to the Secretary of State, who had expressed full agreement. I beg to request immediate information concerning your understanding on this point. 893.51/2101: Telegram REINSCH The Minister in China (Reinsch) to the Acting Secretary of State PEKING, January 22, 1919, 5 p.m. [Received January 24, 12.43 a.m.] My telegram of January 16, 7 p.m. Japanese Minister now specifically informs me that in conversation with Ishii May 6 and May 11, 1918, Mr. Lansing stated that the American Government felt only a historical interest in the matter of currency reform in China and that it had no fundamental objection to the appointment of Baron Sakatani as currency adviser; also advised Mr. Lansing consented expressly that Ishii telegraph his Government to that effect. 64 I hesitate to believe that the Secretary of State should have yielded in an unmodified form and without quid pro quo one of the principal interests of America in China, in whose establishment and protection the Legation and leading Americans in China have been concerned for the last fifteen years and which has been guarded with great pains by the Legation under the instructions of October 13, 2 p.m., 1917, accomplishing this in a private conversation of which a record was apparently kept only by the party claiming the advantage. Therefore, I am anxiously awaiting your statement as to the real status of this matter before doing anything to modify the position taken or carefully to retrace the steps taken up to the present for the protection of this American interest. In the absence of information, position is most embarrassing. REINSCH 63 Ante, p. 421; see also Foreign Relations, 1918, p. 162. 64 Foreign Relations, 1917, p. 149. 893.51/2102% The Japanese Embassy to the Department of State On the 11th of May, 1918, the Secretary of State gave the Japanese Ambassador an assurance to the effect that the Government of the United States would not see any objection in the employment by the Chinese Government of Baron Sakatani as Financial Adviser. In the course of conversation with the Chinese Minister of Finance on the 14th of January, the Secretary of the Japanese Legation in Peking was given to understand that it would be difficult for the Chinese Government to settle definitely the question of Baron Sakatani's advisership before an understanding was arrived at between China and the United States in that connection. Dr. Reinsch called on the Japanese Minister on the 16th of January and had a frank exchange of views in regard to the question of currency reform in China. On that occasion, the American Minister told Mr. Obata 65 that he had not been informed by the American Government of the above stated assurance given to the Japanese Ambassador concerning Baron Sakatani's Advisership. At the request of the Chinese Government, Baron Sakatani is shortly proceeding to Peking where the final agreement with regard to his advisership will be settled. WASHINGTON, January 24, 1919. 893.51/2102: Telegram The Minister in China (Reinsch) to the Acting Secretary of State PEKING, January 24, 1919, 7 p.m. My telegram January 16th, 7 p.m. Minister of Finance informs me that conditions of Sakatani's proposed appointment [omission] rank and salary are that he shall be given a secretariat of his own appointment of experts and clerks to be used in investigating currency matters. It was intimated to me that as the negotiations for retaining Sakatani originated in connection with the advances on the reorganization loan made by Japan and as these advances were now being gradually repaid, that the definite appointment of [foreign?] currency adviser might very well wait until currency loan negotiations have actually been taken up and all parties interested can be consulted. Japanese Minister however is pressing very strongly for the conclusion of the contract with Sakatani, and as he states that the Governments concerned have agreed, the Chinese |