The New York herald., 1921-03-30
HUGHES APPROVES
CHINA CONSORTIUM
International Financing Prof.
ect Acceptable in Principle,
Morgan & Co. Notified.
open DOOR INVOLVED
Equality Of Industrial Oppor-
tunity Stand Taken by Sec
retary in Note.

WASHINGTON, March 29.--The prin-
ciple involved in the effort Of the Ameri-
can group of bankers in cooperation with
bankers OF France. Great Britain and
Japan to encourage American interests
in the assistance OF China through the
international group known as the CHI
| nese consortium has the approval OF the
United States. Secretary Hughes in
| formed J. p. Morgan 6 Co. for the Amer
| lean group on March %, in a letter made
public tonight blythe State Department.
At the same time communications from
1918 to 1920 among the four Powers dis
GUESSING policies involved in the forTna-
ton of the consortium were made public
simultaneously with their publication In
London, Paris and Toxic.
| In giving the approval of the Harding
! Administration to the declared purposes
of the consortium as entered into by the
/ American bankers with the sanction OF
the Wilson Administration Secretary
Hughes took occasion to declare for
equality of commercial and industrial
opportunity" to individual enterprises
Of all nationalities in China, statement
which was regarded here as reaffirma-
] ton of the John Hay policy of the open
! door.
Since the conclusion of the corsor-
tium however, China has shown no dis
| position to accept it, and so far as Is
known has never replied to the joint
note OF the American. British, French
and Japanese Ambassadors in PelSin to
the Chinese Government announcing Its
adoption.
The various documents made public
tonight ranged from an account OF the
| initiation of the project for the pooling
by banking groups of the four powers
| "of all their existing and future options
| in China, except those already in oper-
/ ation," for the financial assistance OF
| China In the establishment of her great
| public utilities, to the text Of the agree
ment concluded October 10. 1920. a sum-
mary of which has previously been pub
| lished.
The greater part of the documents
were devoted to the controversy engaged
1 in between the British and American
! Governments on the one hand and the
Japanese Government on the other in
which the British and American Gov
ernments in series of almost identical
notes refused Japan's claims to Especial
rights and interests in the Chinese
provinces of southern Manchuria and
eastern inner Mongolia. 1t was on ac-
count of this claim that Japan asked
| exemption of the provisions OF the con-
| sortium from these provinces.
| To these claims of Japan Secretary
Lansing In a letter of October 2S. 1919,
said. TT would be a calamity II. the
adoption OF the consortlum were to
carry with 1t tho recognition of doc
| trine Of spheres of interest more ad-
vanced and far reaching than was ever
| applied to Chinese territory. even in the
| period when the breakup of the empire
| appeared imminent"
, Similarly. Great Britain replied that
the "claim put forward by the Japanese
Government in regard to eastern inner
Mongolia. amounting to the reservation
of an exclusive interest in large area
whose southern boundaries practically
envelop Pekin. cannot be reconciled with
the maintenance of the independence
and territorial integrity OF China, which
Japan has so often pledged herself to
observe
Japan finally abandoned her attempts
to achieve her object through diplomatic
negotiations with the two Powers and
compromise was effected by Thomas
w. Lamont of the American group. and
subsequently accepted by all the groups,
whereby Jepans rights over certain
railroads in Manchuria were acknowl-
edged as beyond any jurisdiction OF the
consortium.