The sun., 1919-08-26
CONSORTIUM PLAN
!. HANGS IN BALANCE
Japanese Cabinet VIII In
sist on Excluding Manchuria
and Mongolia.
MAY UPHOLD MILITARIsTs
Failure Of Plan for Finances Of
China Might End Japan's
Democratic Movement.
By tAe Assocsahed PreAs.


TOXIC, Aug 20 tdelayed).-rt IN re-
ported that at It's meeting yesterday the
Imperial Cabinet UNFOLDING the opinions
advanced by the military element in the
Government, decided to insist on the
exclusion of Manchuria and Mongolia
from the coneortium by which the United
states. Great Britain, France and Japan
will assume a dominant position In the
finances of China 1t Is said that nego-
tiations will be resumed with the Powers
on that basis
The AsaM Shimbum says that Viscount
Uchida, Foreign Minister, spoke in favor
of Japan's unconditional entrance into
the consortium. explaining that II Man.
churia and Mongolia were excluded from
the scope of the agreement It might be
interpreted as showing Japanese designs
on China and obstruct loans urgently
needed by China He is reported to
have expressed the belief that such an
impression would be inimical to the in
terests of Japan and might place the
nation in a position of complete isola-
ton, adding that, on the contrary,
Japans unconditional adherence would
remove suspicious on the part of China
and the Powers concerning Japan's sup
posed aggressiveness as a result OF the
acquisition of important interests.
are urging the acceptance Of the Ameri-
can proposal. but that the military
groups fear to jeopardize special politi.
cal interests in Manchuria and Mongolia
WASHINGTON. Aug. 25.-Organization
or a new consortium for financing
Chinese loans was announced In Paris
in May. While the United States. Great
Britain, France and Japan will assume
vnaittNr ChtnaGa finances
the loan will not be limited to those
countries.
Under the plan, which is understood
to have been proposed by the American
Government, funds for China will be ad-
vanced by a group of bankers in each
of the countries. Thirty-seven American
banks are interested. The Government.
: It has been said at the State Depart
ment, practically, II not In specific terms,
will guarantee the investment OF the
American banks.
Recent Japanese mails have brought
to Washington reports of discussions in
the Japanese press of the proposed con-
sortium which to officials here indicate
that the issue has become one of the
greatest Importance as affecting the re-
lations Of Japan with other nations and
especially with the United States.
The consortium was an American con-
fernational lawyers as a means of main
tanning the open door, in China, which
they believed to be threatened by ia
pans construction OF the Lansing-Ishii
agreement. which recognized Japan's
special Interests in China In order to
counterfeit that wrong Impression on the
part of certain elements in japan. the
State Department did not hesitate to ap-
prove the consortium and to assure
ArnariCan Ana prial tpfaraefQ ~
port
From It's Inception the project was
subject to controversy In Japan, but by
steady pressure and appeals to the bust
ness interests of the country and TO the
more liberal younger elements the Hara
administration, the first civilian control
that the country has known, has been
able to obtain sanction for the particl-
patton of Japan on the theory that the
operations OF the great banking group
were to extend to China proper. The
milNaristic factions in Japan, reluctant
at first, appear to have drawn the line al
surrender of what they insist are Japan's
exclusive rights in Manchuria and Mon
golia.'
Latest advices from Toxic to Wash
ington were that Premiar Hara was try
ing to stem that tide Of opposition. The
decision Of the diplomatic council against
the Governments attitude may oblige the
Government to change its position and
notify the other party Powers that Mon
golia and Manchuria must be omitted. In
Far Eastern circles in Washington the
opinion is expressed that without Japa'
nese participation the consortium Ii
doomed to failure.
II Premier Hara decides, because Of
foreign pressure. to oppose the miiitartst'
IL is declared by Far Eastern students
here that he must be prepared to make
the hzht of his life, and his failure woult
mean the collapse of the new japanese
democratic movement and the return tc
full power of the great military elements
whose reactionary policies might involve
Japan in most dangerous controversies
with her late allies and assistants.