893.51/2587: Telegram
The Secretary of State to the Ambassador in Japan (Morris)
Your December 20, 6 p.m. In response you will please say:
“The Government of the United States has withheld diplomatic support from the loan of the Pacific Development Corporation and is still withholding such support though the information comes to the United States Government that the parties to the contract are proceeding to execute it notwithstanding that position. The Government of Japan will realize the United States Government is powerless to prevent and would be loath to interfere with the activities of its citizens abroad unless the consortium should be organized. The United States Government has guaranteed to the American Group in the proposed international consortium complete and exclusive diplomatic support, but unfortunately, it seems to the Government of the United States, the consortium has not yet been organized and until it is in operation the American Group will not be in a position [to] avail itself of the promised support.
In the meantime the Government of the United States has done all within its power to effect an accommodation between the three other Powers concerned with the consortium. Of these Powers England and France are in perfect accord with the United States while the Government of Japan alone seems to have been unable to agree entirely.
The United States Government must in all frankness say that unless the consortium will be organized it will not be justified in withholding diplomatic support from the individual efforts of American citizens abroad, whether in China or elsewhere. On the contrary the United States Government will feel that its citizens have a right to expect from it full diplomatic support when engaged in proper activities.
The United States Government is keenly sensible to the embarrassing circumstances this situation may develop and desires to remind the Government of Japan that one of the objects of the consortium [Page 553] is to replace the uncontrolled activities of individual enterprise in China by a cooperative organization in which the citizens of the four powers most interested in China will join in a spirit of friendliness which can be such a potent factor for the welfare of China and for the good relations of the four powers concerned.
The United States Government has been entirely frank in its professions to the Government of Japan and fully realizes the Government of Japan is cognizant of that fact and well aware that the present situation has developed in spite of the efforts of the United States Government and certainly not because of them.
Further the hope can only be expressed that the Government of Japan will in the near future indicate its adherence to the consortium proposals. In that case the United States Government will be in a position to act with some degree of authority over the activity of its citizens in financial matters in China and will be able, it is certainly expected, to direct the loan of the Pacific Development Corporation through the American Group into the Consortium.”