[This Document is the Property of His Britannic Majesty's Government.]
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AFFAIRS OF CHINA.
CONFIDENTIAL.
Res 7 JAN II [December 15.]
SECTION 4.
[46019]
(No. 313.) Sir,
No. 1.
Sir Edward Grey to Sir G. Buchanan,
Foreign Office, December 15, 1910. WITH regard to the proposed American loan to China, Count Benckendorff told me to-day that M. Sazonow was apprehensive about its effect in Manchuria.
I told him that our knowledge was very vague as to the purposes for which the loan was intended; and I gave him a memorandum stating what we knew on the subject. I also told him that I understood that the Americans-who alone were conducting negotiations at Peking-were meeting with difficulties as to the appointment of a financial adviser. I did not know whether the Americans had stipulated for an American financial adviser, but I heard that the Chinese were objecting to the appointment of any financial adviser.
As to participation in the loan, I was not at all anxious to facilitate a loan which might result in the establishment of an American financial adviser. But I had no means of preventing the Chinese from borrowing from the Americans if they desired to do so, or of preventing British financiers from taking up a part of the American loan if it was offered to them. If I dissuaded one financial house from participating, another financial house might participate without saying anything to me.
Count Benckendorff observed that British financial houses had often told him that they must know the views of the Foreign Office before embarking upon loans.
I replied that, a few years ago, when there was a question of taking up a Russian loan here, British financial houses had naturally made enquiries from me; for if they had embarked upon the loan, and then discovered that there were diplomatic difficulties between the Russian and British Governments, they would have been unable to place the loan. In circumstances such as these, of course, the financial houses came to the Foreign Office to make sure that diplomatic relations were satisfactory. But when they had no apprehensions of this sort, they did what they pleased. In the case of an American loan to China, they would feel sure that the Americans would see the thing through; and they would therefore have no hesitation in participating on commercial grounds alone.
[1810 p-4]
I am, &c.
E. GREY.
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