893.51/4293
The American Group to the
Secretary of State
New
York, May 11,
1923.
[Received May 12.]
Proposed Consolidation Loan
Sir: Referring to our letter of May 5th,59 we enclose copy of
cablegram No. 4616 received by us yesterday from Messrs. Morgan,
[Page 542]
Grenfell & Co., London,
giving text of the message cabled on May 10th to Peking in reply to the
joint telegram from the four group representatives of April 28th.60
This cablegram also contains text of another joint message from the
Peking representatives to which we call your particular attention, and
should be glad to receive your observations thereon.
Respectfully,
J. P. Morgan & Co.
For the American Group
[Enclosure—Telegram]
Messrs. Morgan, Grenfell
& Co., London, to Messrs. J. P.
Morgan & Co.
London [undated].
[Received at New York, May
10, 1923—2:30 p.m.]
4616. 2107. Following telegram despatched to Pekin today with
approval of T. W. Lamont:
The following is for four groups. After careful consideration
of your joint telegram of April 28th, it is with much
reluctance and regret that we find ourselves unable to agree
to your proposals with regard to cash advances.
In our view the effect of the considered Consortium policy of
abstention from administrative advances has, on the whole,
proved of benefit to conditions in China, and we are not
convinced that the time has yet come to abandon it, nor does
the present Cabinet appear to contain a sufficient element
of stability to justify such a course or to afford
reasonable hope of forming the nucleus of a stable central
government.
It is recognized, however, that the question of cash advances
may arise in a different form in connection with the
floating debt, the examination of which was authorized in
our telegram of April 30th, and with which we hope it may
still be possible for you to proceed.
Hongkong & Shanghai Banking Corp. have today received following
cable from Pekin dated May 9th which has crossed the above:
The following is for four groups. Re
our telegram of April 28th, in view of recent outrages on
Tientsin-Pukow Ry.61 which is
regarded here as gravest act of barbarism since Boxer siege,
it is evident that our negotiations cannot be pursued on the
lines contemplated, but on conditions of far-reaching nature
which doubtless will be fully considered by our governments.
We consider, however, that if your Ministers here had
authority to promise financial assistance on conditions to
be determined by them and as part of debt consolidation
scheme, it would give them powerful leverage in securing
acceptance of their demands which the Chinese fully expect
to be of a drastic
[Page 543]
nature. It appears to us that the powers have a great
opportunity now of putting an end to military misgovernment
in this country, which is a rapidly increasing danger to
life and property, and is a fundamental obstacle to any
attempt at reform.
Sir Charles Addis proposes to reply that message has been
communicated by groups to their respective governments whose
observations are awaited. Cable if you approve.
