861.77/1773
Mr. Thomas W. Lamont to the Under Secretary of State (Davis)
[Received October 19.]
Dear Mr. Davis: Referring to our conversation over the telephone last Thursday on the subject of the Chinese Eastern, and your request that the Consortium delegates give their serious consideration to the subject, you will be interested to read the following Minute that was unanimously adopted by the Consortium at its final conference on Friday:
“It was resolved that the Consortium will, if desired by their respective Governments, and if market conditions permit, consider an application for a loan to meet the financial requirements of the Chinese Eastern Railway, estimated at $10,000,000 Gold, provided satisfactory conditions can be arranged as to security, as to the payment of the debts due from the Allied and Associated Powers, as to the Allied and Associated Powers undertaking that there shall be no military interference with the traffic of the Railway, and as to the position of the representatives of the Consortium Powers on the technical Board (or other administrative body) being regularized and stabilized.
[Page 723]“The Japanese representatives stated that they were not in a position to express their views on this question, for the reason that the Japanese Group were not authorized by their Government to take up the matter, pending negotiations between the Governments concerned and further that the Japanese Group considered the matter as technically lying outside the scope of the Consortium Agreement,”
Technically, I think it is true that the Chinese Eastern for the moment perhaps falls outside the scope of the Consortium and that therefore the action of the Japanese delegates in declining to discuss it was not surprising. At the same time, of course, it is a situation of international importance and the Consortium has been organized for the purpose of trying to help out by international co-operation in Far Eastern problems.
You will note from the Minute quoted that the situation is now up to the Governments as to any request that they may make upon the Consortium.
Very truly yours,