Los Angeles herald., 1909-09-01
in MODERN CHINA
XEI-Rairoads and "Rightb Recovery"
By Frederic j. HaSAin

Dettef, as tRere was silSh'iy
: market for 4upplies, both England anu
t Germany being open.
f The greatest project now on the
| tapis is the building of railway TO
, connect Hankow, the interior metrop-
, oils, with Canton on the south, as IL is
already connected with Peking on the
. north, and to extend a line westward
from Hankovy to the rich and now al
J most inaccessible province OF Sze
!, Chuan This is the road which has
been the center of interest in Chinese
( financial circses for so many months
past
A propositidn to finance this project
!, was first made to the British, but they
refused to consider it except on the
; basis of the TERMS of the Kowloon-Can
, ton loan, meaining British supervision
ana British market for supplies. The
English bankelrs believed that 1t was
. impossible for sthis loan to escape them
a and thew heidi out for the old terms.
The Chinese Interpreted their promise
to the British | 20 mean only that the
., British were tto have first chance at
, the loan. THEM Germany offered the
. loan on terms slightly more advan-
\, tageous. The herman offer was ac-
! cepted, the agrbement being for loan
! of five and a half million pounds ster-
ling 275OO 000I OF this amount $2,-
100000 was to hbe used in retiring old
4 Belgian bonds lowering an old conces-
sion bought in Iky the government. and
the balance wak to be equally divided
between the HaN1kow-Canton or south
Fern line. and the Hankow- e-chuan,
or western line.I the whole loan to be
taken in equal uarts by German, Brit
ish and French 1banks. The provision
was made thaHt German engineers
should be employed on the western
line to use GermEan materials, and that
British and Frkench engineers using
! ha
; British and Frene ech material snould DC
omnloved on thek southern line.
This was intenasely annoying to the
, British interestsR in China, whlch
claimed the excll Alsive right to nnance
the road. The BH-itish were especially
incensed by this koortion of the agree
ment which gavtR the western nne OF
the road to Germ IAN engineers, as that
line lies in the YsRng-tze valley Whlcn
} Great Britain hafA, heretofore regarded
as its particular Asphere or innuehce'
The British press Df China roareo with
, INDIGNATION and uiWlhe British business
men in the clubs Fdeblared that it wasn't
business questr rorh at all, that II was
question for vtarRhips.
| Then, while tn sTir was heavy with
British swear wbrdsA and While German
eyes twinkled bFighKly over the rim Oh
= tbe heer mug. a newh factor made itself
fnlt The chaHge Ad'affaires of the
American legati pm, lNenry +. fletcher'
: made a protest against the loan, AZ
Iegnpe that a promis&e had been made
in 1905 to let the I'm ed States nave
chance at that paHfticuiar business.
? TIt that was not Eli. Mr.. Fletcher
l told the Chinese thtEt the American
financiers were willinN TO loan emma
money to build railro ads on a purely
business basis at SO m Alch per cent, and
they might btl mate1Hials in the open
, markets. of the world n from the lowest
bidder That was thek hrst time any
!, body had ever made Cahlna an oHer 10
! loan money ON a pureAy banking basis
without strings tied tto the scneIne'
!, The proposition was a oompsneli. Inc
|. agreement with GermaM ny was already
signed and awaited onaly the imperial
p edict to make II bindlIng. me Amer
!, ican nropositlop held urm all action,
q The cables brought nd ws OF power
t full American syndicate 3elns organizea
in New York, bAcluding =. Z. Morgan q
Co., Kuhn, Loeb & Co. and the Flrsr
. and the City National anks' The m
. ternational Banking cd#rporatlon, the
!, only American bank in the Tar east:
hastily opened branches #at Peking ana
! Hankow. Secretary K nox issued
. statement announcing pc deterlnlna-
9 tion of the United StatesN TO be up ana
doing in Chinese financesA Ihe press OF
China, both native andH foreign, was
u filled with comments on ne american
INVASION -
= On every hand one hear meE talking
t about Americans getting in the game"
: ana men of every nat Hpnality said:
f srrbat Is what comes of Having q man
in the White House wiz knows the
orient and appreciates til advantases
g to be gained by an aggreWslve BUSINESS
d policy in China" The ul%lmale result
g was, as the world knows, the increase
d of the loan to G6,000,000 sterllng anu
= it's equal division betweerU tne Onlteo
q ,gitb the terna Greatly lib bralized and
the market for materials Uextended to
= those four nations. w.
1,o,,,a1,er docs NOT lie in his loan and
4 its negotiation. 1t lies In II ne Iaet tnat
4 the United States as govet rnment mas
h undertaken a business cay hpalEn III
v China. 1t lies in the facT tnst tne
terms offered by Americanl nnanclers
will permit China to float II lluLe loans
! on terms Of equality with 3otnel Dor
! rowers and thus build ra WAYS as
) cheaply as other nations pliunu mem.
: ,,oaster strolte of financial II diplomacy
+ha TInited States has addell!d another
;tey, ttt~ 70 the debt of diploma eatic trati-
: tnda which China owes to d he United
s+otas American participate ion IL. this
: loan and the influence whif IN nlwill
] have upon future loans mari rs aong
a stem forward in the Chinese '' aign
! of ''rightr recovery" es II
Q TomOrrow-In Modern China; - " Chi
Y nese as Railroad Builders Estl,