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Charles Addis returned to New York on the 9th October. There were three alterna tive courses of action to choose from: to refuse to sign and to break off the confer- ence if the French group's position remained unchanged; second, to sign and trust to the French bringing their agreements later; third, to sign subject to a reservation by which the French would agree to be excluded from the benefit of the agreements contributed by others. If the French rejected this reservation then the British group were to withhold their signature and refer to their Government for instructions. It was the third course which was approved by Sir Auckland Geddes and by the American Acting Secretary of State, but the latter made it a condition of his approval that if in these circumstances signature were suspended the British group would continue in session until the decision of their Government was made known. The representatives of the French group were at once informed of the action taken, and consented to telegraph to Paris a recommendation that the Banque Industrielle should be invited to join the French group, and that pending the completion of that arrangement authority should be given to them to accept a resolution framed by the British group excluding the French group from the benefits of the agreements pooled by the other groups. Throughout these proceedings the American group showed themselves comparatively indifferent to the issue, but the Japanese representatives concurred in and supported the British view.
Opening of Conference: Chairman.
At the opening of the conference on the 11th October, in view of the position of the American group as hosts. it seemed appropriate to ask their senior representative, Mr. T. W. Lamont, of Messrs. J. P. Morgan and Co., to take the chair. He carried out his duties with great tact and fairness. The following notes on the proceedings at the various meetings should be read in conjunction with the agenda and formal minutes, and are intended to throw light upon them and supplement them where
necessary.
Amendments to Consortium Agreement.
The first business of the meeting involved three amendments to the draft of the Consortium Agreement as approved in Paris on the 11th and 12th May, 1919-
1. Government Support.
The first amendment, dealing with the degree of Government support to the consortium, was made at the instance of the respective Governments and requires no elucidation.
2. Chinese Government Guarantee.
The second amendment arose on a question brought forward by the Japanese group as to the meaning of the words Chinese Government or Chinese Provincial Government guarantees."
loans
to companies having discussion a new wording was adopted, covering any transaction involving a public After issue to which the guarantee of the Chinese Government attached.
3. Objects of Consortium,
The third amendment arose from a suggestion made by the British group that the agreement should contain some expression of the aims of the consortium in language which when published might appeal to Chinese public opinion as indicating a benevolent attitude towards China and as emphasising the desire of the consortium to assist China in raising capital from Chinese sources. With this object in view,
the British group had prepared a more comprehensive statement than is contained in the wording which was ultimately adopted in deference to the wishes of the American group.
Belgian Group.
In considering the application from the Belgian group for admission to the consortium, reference was made to possible applications from other Powers, such as Holland and Switzerland, and it was decided that the consortium was bound by resolution 4 of the Paris meeting of the 11th May, 1919, to welcome the Belgian group, but that it would not be necessary to give them an equal share with the existing four groups. and the proportion was fixed at one-ninth for the Belgian group, leaving two-ninths for each of the other four groups. At the suggestion of Sir
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Charles Addis it was decided to recommend that when the resolution welcoming the inclusion of the Belgian group is communicated by the respective Governments to the Belgian Government their attention should be called to the reported conclusion of a loan agreement with China for 60,000,000 fr. (cide letter froni State Department to Messrs. J. P. Morgan and Co. dated the 11th October, 1920, Appendix 1) and to enquire if it was the intention of the Belgian group to bring this particular agree-
ment into the consortium,
Italian Group.
Regarding the Italian group, it was decided to treat the application of the Italian Ambassador at Washington and of the Italian Financial Commissioner in New York made in 1919 as an application on behalf of an Italian group, but the conference was unanimous in thinking that in view of the present economic conditions in Italy and the state of Italian exchange it was premature to consider the entry of
Italian
group into the consortium.
an
Russian Bank.
The next item on the agenda dealt with the position of the Russian group under loans in which they had participated, and though it was considered in the discussion that their position remained technically unaffected it was thought that no useful purpose would be served by recording any minute under this heading. Chinese Group.
On the question of Chinese participation, Mr. Lamont addressed the meeting on the subject of his recent visit to China and his discussions with the group representa- tives at Peking. Sir Charles Addis considered that the consortium should show the fullest readiness to co-operate with a Chinese group if such group were prepared to undertake the obligations as well as to share in the advantages of the consortium, by issuing their quota of any loan in silver in their own market in China or in any case an amount at least approximately corresponding to the individual shares of the other groups,
Conditions of Pooling of Agreements.
The tabling and pooling of existing agreements was next considered, and gave rise to much discussion. Sir Charles Addis pointed out that in the present economic circumstances many of them might not be dealt with at all during the life of the consortium, viz., five years, and that should the consortium then come to an end it would be only fair that existing rights should revert to the present holders. This principle was adopted, but consideration was deferred of the second resolution already referred to limiting the right of participation in pooled agreements to such groups as had themselves made individual contributions to the pool.
Eapenses arising from Residuary Participation.
Mr. Mortimer Schiff, a member of the American group, raised a question as to the meaning of the words "total expenses in article 6 (5) of the Consortium Agreement, and it was agreed that underwriting expenses were included under the words used.
Second Meeting.
The second meeting of the consortium was held on the 13th October, the inter- vening day having been spent in informal interviews with the representatives of the various groups.
Currency Loan.
The question of the renewal of the Currency Loan Agreement was discussed, and an application for a further six months' extension was resolved on. It may be mentioned that before the representatives left New York information was received by telegram from Peking that this application had been granted.
Tabling of Pooled Agreements: Reservations regarding Agreements Pooled.
The secretaries of the conference having reported that copies of the various individual agreements and options pooled by the British, Japanese and American groups, and of the agreements pooled in common by all the groups, such as the
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