[Enclosure]
The Managing
Committee to the Members of the
American Group
New
York, April 24,
1922.
Dear Sirs: We have recently received
various inquiries from members of the American Group, and from other
sources, as to when it might be expected that the Consortium for the
assistance of China might begin functioning. Inquiry has also been
made as to whether, if the Chinese Government did not soon recognize
the Consortium, it would be wise to consider the dissolution of the
American Group. It is altogether likely that no such question has
arisen in the minds of your good selves, but in any event, for your
information, the Managing Committee has asked us to state to you
that it is of the clear opinion that the American Group should
continue intact, and with patience await the outcome of the
situation in China.
For your further confidential information, Secretary Hughes recently
expressed his personal opinion to one of the members of the Managing
Committee that any possible withdrawal from the Consortium by the
American Group at the present time would be a very serious matter,
as concerning the status of affairs in the Far East. The Secretary
expressed the earnest hope that the members of the American Group
would continue to have great patience and be prepared, when the time
came, to render their assistance along sound and legitimate lines to
furthering the objects of the Consortium, which were designed not
only for the maintenance of the principle of the Open Door in the
Far East, but also for the upholding of American prestige.
In forwarding to you this informal expression, the Managing Committee
suggests that we remind the members of the American Group that the
Consortium was formed originally at the instance of the Department
of State; that subsequent to the formation of the American Group
along lines laid down by the Department, the Department secured the
acquiescence of the Governments of Great Britain, France and Japan
to the establishment of a new consortium for the assistance of China
along broader lines than ever before. Thereafter, after considerable
difficulties, the Consortium was duly organized by banking groups
representative of the investment interests of the four countries
involved, and since that time the Consortium has been prepared
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to render such service as
it could. Thus the organization of the new Consortium has been
peculiarly of American inception, and to its continuance through
reasonable conditions American good faith would seem to be
pledged.
The members of the American Group, we believe, clearly understood at
the time they were invited to participate in it, that while it was
expected the operations of the Group and of the Consortium would be
conducted not without profit, nevertheless the organization was
largely in the nature of a public service designed to substitute the
principle of international cooperation instead of competition on the
mainland of Asia. At that time the Managing Committee felt and still
feel that any break-up of the Consortium would at once lead to a
reversion of conditions in the Far East gravely detrimental to the
welfare of China, the re-establishment of the baneful spheres of
influence, and the undoing to a considerable extent of the
comprehensive work accomplished at the recent Washington
Conference.
The reason for the policies of our Government in China is to be found
in the conviction that, in the interests of the future economic
development of our own country, it is essential that there be
preserved equal opportunity for practical participation by Americans
in the financial and industrial development of China. The activity
of American bankers in this field is, therefore, not a matter of
mere academic concern, or the support of an abstract governmental
purpose, but is provision for a future stage in which they, jointly
with American manufacturers and merchants, will feel the need for
expansion in the potentially rich markets of China. It is hoped that
even a protracted unremunerative period of delay, before the
Consortium can begin active operation, will in the long run prove
amply justified by the ultimate benefits to the commercial and
financial interests of our own country.
We have no doubt that you will agree with us in all of the foregoing,
but this letter is simply addressed to you privately for the purpose
of covering the points brought out.
Yours very truly,
J. P. Morgan & Co.
For the Managing Committee
