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Memorandum by the Minister in China (Johnson) of a Conversation With Mr. Jean Monnet48
Mr. Monnet called and we had an hour’s conversation, in the course of which he told me something of his plans, pretty much as they had been described to me by Mr. Drummond on May 3rd.
Mr. Monnet stated that while Soong was in Europe he was very anxious to obtain financial assistance from American and European bankers and had had conversation to that end with Mr. Lamont and Sir Charles Addis. Mr. Monnet stated that Mr. Lamont had informed Soong quite frankly that any plan for financial assistance to China along consortium lines must have Japanese participation. He said that Sir Charles Addis agreed with this point of view, but that T. V. Soong was not prepared to accept Japanese participation at this time, although he was prepared to consider it at a later date.
T. V. Soong had invited Mr. Monnet and Sir Arthur Salter to come to China and look over the ground. Mr. Monnet stated that from the beginning he had a feeling that it might be possible to do something. He said that before he left Paris, Ishii of the Japanese Embassy had gone to see him and had told him that Japan would not stand for any cooperation between Europe and China with Japan left out.
Mr. Monnet stated that he and Salter came out and that he had been looking about. It was his idea that if he could only get the Chinese [Page 380] bankers to organize a corporation of their own for the purpose of investing the large accumulations of Chinese capital to be found in Shanghai at points in the interior, the trick would have been done. He said, however, that there were three things which must be done before China could expect financial assistance from abroad. These things he had explained to the Chinese.
In the first place, the Chinese could not expect foreign money to be got into the interior of China where Chinese money was not willing to take the lead; it was necessary that Chinese money show the way to other money by finding proper investments for itself in the interior of China. Next, China must do something about her debts, even including the Nishihara debts to Japan.49 Of course, many of these debts would have to be shaved down in any settlement that was made; nevertheless they were honest debts and China could not expect to accomplish anything until they were paid or an attempt was made to bring about some settlement of them. And third, it was highly necessary that something be done to bring about a reorganization of China’s railways.
Mr. Monnet stated that he found the Chinese generally interested in doing something along these lines, and appreciative of the fact that something of the sort must be done before anything could be accomplished. He stated that he had succeeded in bringing together a number of Chinese bankers at Shanghai,—not simply the International Settlement bankers, but Chinese bankers interested in business outside of the Settlement; and that plans were already made for the organization of a syndicate made up of these Chinese bankers. He was now waiting for Chiang Kai-shek and H. H. Kung to indicate their approval. He thought it probable that something might be done along these lines in the next few days; at any rate, he was hopeful. Once the Chinese banking syndicate was organized it could invite participation on the part of foreign capital in various lines that might be of interest to China.
With reference to the Japanese, Mr. Monnet stated that Mr. Suma had called upon him at Shanghai some two days after the statement of Japan’s policy at home. He stated that Suma appeared to regret the Japanese statement. He said that he had laid all his cards on the table in so far as Mr. Suma was concerned, and he felt that he had won Mr. Suma’s good will, although he was not too sure of this.
Mr. Monnet expressed himself as being very much impressed with Chiang Kai-shek whom he described as “having guts”. He thought that Chiang was an outstanding person in that he thought clearly [Page 381] and was capable of making decisions. Mr. Monnet expressed himself as being very optimistic as to what he might be able to accomplish.