§ 42. Mr. JOHNSTON
asked the Secretary of State for Foreign Affairs whether the British Government supported the Consortium in China in 1913 in its negotiations for the lending of £25,000,000 to President Yuan; and whether he is aware that, as a result of the conditions attached to the loan, the Government of the United States announced its refusal to give moral support to the Consortium?
After the Chinese revolution of 1911, it became evident that a large loan was necessary to enable the new government, under President Yuan Shih-kai, to consolidate its position, and negotiations for such a loan were begun at the instance of the American group in the Consortium; but, as these negotiations drew towards a conclusion, the administration of President Wilson, which had meanwhile come into power in the United States, issued instructions to the American group to withdraw from the loan, for reasons which were not clearly defined but which appear to have been based on the idea that some of the conditions attached to the loan might be held to infringe the sovereign rights of China. This decision, however, did not imply a refusal on the part of the United States Government to give moral support to the principles on which the Consortium is based, as is shown by the fact that the Consortium was reformed after the War on the initiative of the United States Government, whose instructions to the American bankers concerned contained a full re-statement of the policy of co-operation which they favoured in the matter of loans to the Chinese Government.