File No. 893.00/741.
The Secretary of State to the American Ambassador to Great Britain.
Washington, January 24, 1912.
The following received to-day from the Embassy at Tokyo:
Okura firm informs me that one of its directors left on the 20th for Shanghai to negotiate loan by the firm to Shanghai Hang-Chow Railway Co., for 3,000,000 yen, secured on the part of the line between Shanghai and Feng-Chau; 8%; recaption price, 104; redemption period, 10 years. Firm states that money will eventually pass to Revolutionary Government, but the loan is a purely private contract between Okura and Chinese Railway Co., and that Japan refuses to extend support; refusal privately confirmed by Ministry of Finance.
Bryan.
By common accord this Government has hitherto pursued the policy of strict neutrality with respect to loans to China. It has felt it to be a corollary of that policy to look with disfavor, upon loans by its nationals unless assured that such loans should be of neutral effect as between the factions. It has also felt that it is particularly appropriate at present to invoke the principle that a lending Government should deter its nationals from making loans not of a sufficiently broad purpose to secure the approval of said Government in consultation with the other interested powers. The Department fears that the loan now contemplated By the Japanese may have an unfortunate effect upon the group that has adhered to the above-expressed views.