502
[This Document is the Property of His Britannic Majesty's Government.]
[B]
AFFAIRS OF CHINA.
CONFIDENTIAL.
19687 RECO
&
REG 16 JUN 11
[May 26.]
SECTION 4.
[20923]
(No. 119.) Sir,
No. 1.
Sir Edward Grey to Mr. Rumbold.
Foreign Office, May 26, 1911.
I TOLD the Japanese Ambassador to-day what had passed between Count Benckendorff and Sir Arthur Nicolson yesterday on the subject of the proposed lan to China for currency reform and industrial enterprise in Manchuria. As the Russian Government had communicated with us about it, I thought I was bound to let the Japanese Ambassador know, in case his Government had any views to express. Our attitude towards the question had necessarily been rather passive hitherto. But we might be asked to take diplomatic action at Peking, and I did not wish any action on our part to run counter to Japanese interests. It seemed to us that we could not bject to the advance; and that the time to consider whether there was likely to be any damage done to Japanese or Russian interests would be when the programme of enterprise in Manchuria was drawn up.
The Ambassador said that it had been reported in Japan that one condition of the loan was that, in connection with all future enterprise in Manchuria, application should be made to the group which was arranging the loan. This report had created considerable feeling.
1 said that this was new to me. I could understand that Japan and Russia would feel very strongly if they were to be excluded for ever from any participation in loans for future industrial enterprises in Manchuria, and such exclusion would hardly be consistent with the open door.
Sir Francis Campbell produced the text of the loan agreement, and we found that future borrowings were limited to when more money was required for currency reform or the particular programme of commercial enterprise which was to be connected with this loan. This programme had not yet been drawn up.
The Japanese Ambassador admitted that, if the programme of industrial enterprise was, as it appeared primá fucie to be, only a matter of 3 or 4 millions, this would not be open to objection.
[2023 cc-4]
I am, &c.
E. GREY.
1