893.516/11–1945
Mr. Thomas W. Lamont 2 to the Secretary of State
Sir: In 1939 we exchanged certain correspondence3 with the Department as to the desire of the Managing Committee of the American Section of the China Consortium4 to reduce their contribution to the expenses of the central “clearing” office in London, in view of the change in conditions which had taken place since the Consortium was organized; also because under the provisions of the Banking Act5 the great majority of the members of the American Section were forbidden to undertake the principal function for which the Consortium was originally organized; namely, to render assistance to China through the issuance in the Western markets of such government and/or railway or public utility loans guaranteed by the Chinese Government as might be considered sound and marketable in the several Western markets.
An interim arrangement to reduce the contribution as mentioned above was made and payments were made by the Managing Committee of the American Group through the first half of 1941, subsequent to which date no further charges against the American Group have been made.
We recently asked the office of Messrs. Morgan Grenfell & Co. Limited to explore the present attitude of the Hongkong & Shanghai Banking Corporation, which acts as the Central Clearing Office, repeating our views that no useful purpose seemed to be served by maintaining the existence of the Consortium, at least so far as concerned the American Group members. In reply we have received the suggestion that we submit this tentative inquiry more formally and that we indicate to the Hongkong & Shanghai Banking Corporation that the American Group wishes to withdraw. We are given reason to [Page 1343] believe that the Hongkong & Shanghai Banking Corporation might be disposed to accept complete disbandment of the Consortium.
Under the circumstances set forth above, we are of the opinion that a majority of the members of the American Group would favor its withdrawal from the Consortium, but before communicating with the Hongkong & Shanghai Banking Corporation to such effect, we are writing to consult the Department.
We should appreciate word as to whether the Department interposes any objection. Although the files of the Department contain complete information in regard to the Consortium, nevertheless, as a matter of convenience to you at the present moment we have prepared the attached brief memorandum covering its general history.
Respectfully,
- Of J. P. Morgan & Co., Inc., Representative of the American Group of the China Consortium.↩
- See letter of July 31, 1939, from Mr. Lamont to the Adviser on Political Relations (Hornbeck), Foreign Relations, 1939, vol. iii, p. 731.↩
- For organization of the China Consortium, see ibid., 1920, vol. i, pp. 497 ff.↩
- The Banking Act of 1933, approved June 16, 1933; 48 Stat. 162.↩
- For the inception of the Hukuang Railways loan, see Foreign Relations, 1909, pp. 144 ff.↩
- Secretary of State William Jennings Bryan.↩
- See telegram from the Acting Secretary of State to certain American diplomatic officers on March 19, 1913, 9 p.m., and letter from the American Group to the Secretary of State on March 19, 1913, Foreign Relations, 1913, pp. 170 and 171.↩
- See Foreign Relations, 1918, pp. 169 ff.↩
- For the inception of the Pacific Development Corporation loan, see Foreign Relations, 1919, vol. i, pp. 418 and 540 ff.↩