File No. 893.51/1827
Ambassador Page to the Secretary of State
London, November 12, 1917, 2 p.m.
7672. Department’s 5399, September 8, 4 p.m., and my 7201, September 19, 5 p.m., relative suggested participation of American Group in proposed loan of 20,000,000 pounds to China for currency reform purposes, Foreign Office now write me as follows:
Chinese Minister of Finance has approached the groups composing the present international Consortium with a request for an immediate advance of 2,000,000 pounds in the projected loan.
[Page 154]The Japanese Groups having expressed the opinion that the Consortium should comply with this request His Majesty’s Government, who have always in principle been opposed to such advances, inquired of the Japanese Government whether, having regard to the present position of China’s finances, they considered that the advance was necessary or advisable.
The Japanese Government replied to the effect that they earnestly desired to conclude the advance in order to rehabilitate the Bank of China which was a matter of extreme urgency owing to the fall in the value of the notes issued by that institution and the consequent depression in trade and abnormal losses caused to native and foreign merchants. They considered that it would be absolutely impossible to accomplish this unless the advance of 2,000,000 pounds was agreed to. They hoped therefore that His Majesty’s Government would reconsider the matter and instruct the British Group to accede to the Chinese Government’s application. In these circumstances His Majesty’s Government deemed it advisable to meet the wishes of the Japanese Government and the British Group has been informed accordingly so that the necessary instructions may be sent to their representative in Peking to consent to the proposed advance on the second issue of the reorganization loan which is now under negotiation.
Mr. Balfour considers it desirable to bring the foregoing facts to Mr. Page’s knowledge in order that the position of His Majesty’s Government and that of the British Group in the Consortium in regard to this advance may be perfectly clear to the United States Government in the event of a decision being reached in respect of the participation of an American Group in the new loan.