"
2
I am directed by Mr. Balfour to observe that, althongh His Majesty's Government are, as stated in the memorandum of the 8th November to the United States Ambassador, opposed in principle to advances of this nature, he considers it of great importance on the grounds of political expediency to secure the readmission of an American group to the Interuational Consortium and their participation in the projected Supplementary Reorganisation Loan to the Chinese Government. Owing to the inability of the British, French, and Russian groups to participate directly in the issue, it is obvious that, failing such American participation, the money will be provided by the Japanese group alone, and there is reason to fear that the Japanese Government will thereby be able to acquire not only the control of the currency reform scheme, to which the funds obtained from the proposed loan are to be devoted, but a predominant position in regard to China's finances.
As the United States Government would appear to wish to make the eventual participation of an American group in the loan conditional upon the participation of the British group
in the advance, and as the scheme proposed by Sir C. Addis, whereby the British group will provide not only their own but also temporarily the American share in the advance, will morally bind the American group to eventual participation in the loan itself, Mr. Balfour hopes that the Lords Commissioners of the Treasury will give the matter their urgent attention, and, in view of the important political considerations involved, will sanction the issue of the capital required by the British group to provide two-thirds of the advance of 2,000,000l. in the event of the proposal being accepted by the American and Japanese Governments and commending itself to the British banks concerned.
Mr. Balfour desires me to ask that the decision of the Lords Commissioners may be communicated to him at the earliest possible moment, in order that he may be in a position to reply to the note of the United States Ambassador.
I am, &c.
W. LANGLEY.
This Document is the Property of His Britannic Majesty's Government.]
CHINESE LOANS AND CONCESSIONS.
[230008]
(Confidential.) Sir,
CONFIDENTIAL.
[December 8.]
co.
SECTION 2.
No. 1.
Foreign Office to Sir C. Addis.
Foreign Office, December 8, 1917. WITH reference to your recent conversation at the Foreign Office in regard to the proposal of the United States Government for the eventual participation of an American group in the projected issue of a Supplementary Reorganisation Loan of 20,000,000l. to the Chinese Government by the international bankers' consortium, 1 am directed by Mr. Secretary Balfour to inform you that he has approached the Lords Commissioners of His Majesty's Treasury with a view to their sanctioning the issue of the capital required by the British group to provide not only their own share but also temporarily that of the American group in the proposed advance of 2,000,000l. on the projected loan.
Mr. Balfour accordingly directs me to request you to proceed to consult the banks composing the British group in the consortium in regard to their participating in the manner described above in the advance, and he would be glad if you would at the same time explain to them the nature of the American proposal and the importance of securing the readmission of an American group to the international consortium and their participation in the loan now under negotiation at Peking.
I am to enclose for your confidential information a copy of Mr. Page's note.
I am, &c.
W. LANGLEY.
[2762 -2]
169
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