CO129-383 - Public Offices - 1911 — Page 511

[This Document is the Property of His Britannic Majesty's Government.]

6.6

[B]

AFFAIRS OF CHINA.

19687 RECO REGP 16 JUN IL

CONFIDENTIAL.

[May 29.]

SECTION 3.

506

[21257]

No. 1.

Sir Edward Grey to Sir G. Buchanan.

(No. 144.) Sir,

Foreign Office, May 29, 1911. THE Russian Ambassador spoke to me to-day about the loan of the four financial groups to China. The French Government were prepared to refuse a quotation on the Bourse, unless it was ascertained that the loan would not be used for making railways in Manchuria. But it would be undesirable that the French Government should take this step alone, unless we were prepared to support them in some way. It was suggested that we might subsequently say at Peking that the attitude taken up by the French Government was reasonable.

I told Count Benckendorff that I bad had great trouble with the American Government over this matter. At first we had told the Chinese Government that, if they wished to make a railway in Manchuria, they ought to come to some terms with the Japanese Government. In a sense, this was giving our support to the project of the railway. M. Isvolsky had complained of this as a breach of the agreement which we had made with Russia years before, and had asked whether we could not say at Peking at least as much on behalf of Russia as we had already said on behalf of Japan. I had therefore spoken similarly at Peking with regard to Russia. Mr. Knox had com- plained bitterly, and I believed still continued to complain, that this was going beyond the negative attitude imposed on us by our agreement with Russia, and taking a line actively opposed to a legitimate enterprise in which the United States were interested. The Americans had pressed for our support, and I bad explained that, under the agreement with Russia, I could not give them support; and that I intended to leave the matter alone. This I had done ever since then, and I did not wish to depart from this attitude.

I did not see what diplomatic action was yet required at Peking. What I proposed to do was to ascertain from Mr. Addis, who was a member of the British group, what projects it was proposed to forward by means of the loan, and to explain to him that we could not give our diplomatie support for the construction of railways in Manchuria.

I would also explain the position to Mr. Whitelaw Reid, who had asked me some days ago what diplomatic difficulties there were. As the Americans had originated the matter, I would suggest to him that the American group might perhaps remove all diplomatic difficulties by making it clear that the restriction to the four groups of all future applications for financial help applied only to the programme to be undertaken by means of the present loan, and by making known the items of which this programme was composed, in order that the Russian and Japanese Governments might be satisfied that it did not include railways in Manchuria.

I am, &e.

[2023 f-3]

E. GREY.