i
16
though for the time being capital might only be raised in America and Japan yet the central management of the consortium should continue to be conducted by the British
group.
Political Matters not Discussed.
The remaining terms of the agenda of a political nature were not discussed. At the request of Mr. Armstrong. the British consul-general, Sir Charles Addis had attended at the consulate and was shown a despatch from Lord Curzon on this subject. Sir Charles Addis was able to assure His Majesty's consul-general that no political matters had heen or would be the subject of discussion and further that the question of the inclusion of a Chinese group had already been considered and the suggestion of His Majesty's Government adopted.
Votes of Thanks.
Votes of thanks to the New York Chamber of Commerce, where the conference had been held, and to the chairman for presiding terminated the official proceedings.
Visit of Chinese Delegate.
Subsequently, in consequence of information received by the American group that a delegate of the Chinese Ministry of Finance was on his way to New York to discuss business with the consortium on behalf of the Chinese Government, the representatives of the groups were invited to await his arrival, but at an informal meeting with the delegate, Mr. Hsü Un Yuen, on the 18th October, it appeared that he had no definite instructions or authority to deal officially with the consortium. It is understood, however, that on a subsequent occasion he sounded the American group as to the possibility of an immediate temporary advance of 5,000,000 dollars. This overture was discouraged, but was made to serve a useful purpose in connection with the tentative offer embodied in the American group telegram which forms Appendix 3 above referred to.
General Attitude at Conference.
In spite of sharp differences of opinion on various points, general harmony marked the proceedings as a whole, and in particular the British group were sensible throughout of the loyal co-operation of their Japanese colleagues.
Summary of Results.
The results of the conference may be briefly summarised as follows:-
1. The definite inclusion of Japan in a common policy of substituting inter-
national co-operation for international competition in China.
2. The prevention of any expansion or extension of existing Japanese special
interests in China outside of Manchuria (see Appendix 4).
3. The final abandonment of the policy of spheres of influence in China (see
supra),
4. The encouragement of the formation of a Chinese group to assist in the
raising of capital in China itself by the issue of silver loans.
5. The adoption of the principle that agreements pooled but remaining unexecuted at the termination of the consortium should revert to the original concessionaire.
6. The adoption of the principle that no group which has failed to make any individual contribution to the pooled agreements shall be entitled to share in the individual contributions of the others.
These results are substantially those which, in accord with the general instruc- tions of His Majesty's Government. it was the object of the British group to achieve, and they believe that the foundations of a new policy in China have been firmly laid in which British commercial interests have been fully safeguarded.
London, Norember 6, 1920.
C. S. A.
17
APPENDIX 1.
Department of State,
For information of the British Group:
Gentlemen,
Washington, October 11, 1920. IN connection with recent correspondence regarding proposed financial assist- ance to the Chinese Government you are advised that the Department has received a telegram of the 7th October, 1920, from the American Legation at Peking, stating that on the 4th October the Chinese Minister of Communications ratified an agree ment for a Dutch-Belgian Loan for 60,000,000 fr. The text of this agreement was forwarded by pouch on the 20th September.
The above information was in reply to a despatch to the Legation, dated the 27th May last, calling attention to an item which appeared in the Washington Post of the 18th May with: reference to a report that construction was to commence on the Lunghai Railway with funds borrowed from Belgium.
Messrs. J. P. Morgan and Co.,
For the American Group,
I am, &c.
NORMAN H. DAVIS, Under-Secretary.
23. Wall Street. New York.
APPENDIX 2.
Telegram of October 27, 1920, from the American Group to their Representatice at Peking.
THE Finance Minister has sent us unofficial message through Hsü Un Yuen that he would appreciate temporary advance of $5,000,000 to tide over present diliculty. We have explained to Hsü and should be glad to have you inform Finance Minister verbally that consortium cannot consider piecemeal business and that any loan to be successfully offered on American market must form part of comprehensive plan for constructive effort in China; otherwise public will not subscribe. During all of the consortium meetings there was evident the greatest wish to assist the Chinese Government along constructive lines looking to the development for China's benefit of her great resources. Nevertheless, in view of limited amount of fund available for China in near future because European markets are largely closed to any outside investments, the Japanese market has been undergoing difficulties and American market is not yet acquainted with Far Eastern issues, consortium considers that loan should be raised only for constructive purposes, particularly railways.
After having discussed this matter informally with British, French and Japanese representatives of consortium in New York, we are sending this cable to advise Minister and other group representatives in Peking through you that we have been considering means whereby consortium can be of early practical help, and that, subject always to market conditions, we would be prepared to proceed now with consideration of a loan looking towards the completion Canton-Hankow Railway and, when additional funds become available, for the further development of the Hukuang Railway system.
Conditions precedent would be:-
(a.) Complete recognition by Chinese Government of liability of complete original issue of Hukuang bonds without distinction. On this point consortium adopted the following resolution :—
"It was resolved, without questioning that the course hitherto pursued by the Chinese Government has been followed in good faith, that it is now manifest that the successful flotation of further Chinese loans in foreign markets, which are necessary if the work of the consortium for the benefit of China is to be carried out, imperatively requires a public announcement by the Chinese Govern- ment with reference to the German issue of bonds forming part of the Hukuang Loan, to the general effect that after consideration of all the facts and the unprecedented" "conditions involved, and resolving all doubts in favour of the holders of such bonds, the Chinese Government has determined to recognise the entire issue without distinction."
[4917 -1]
F
75