New-York tribune., 1910-01-23
GET CHINESE LOAN
AMERICAN BANKERS
WIN SHARE.
Negotiations BetWeen Morgan
Syndicate and Foreigners
Com pleted.

The negotiations Wnlcn nave peeh
| going on for some time between j. +.
| Morgan & Co. representing the Ameri-
can syndicate and the English. French
and German bankers in the matter of
! the Hankow- -Szechuen Railway loan of
! $4,000. .000 have been finally completed,
according 10 reports received In the
| financial district yesterday. England
| France Germany and America. II is said,
! are each TO receive a one-quarter inter
| est in the loan, or $1,500,o00 each. 1t
| is expected that the allotment of bonds
will be announced in the near future.
Under the terms Of the agreement as
reported, ]. ?. Morgan & Co. are to re-
| imburse the old Macy Hawley syndicate,
which held the original concession from
the Chinese government, for all cash
| outlays made and also give it substantial
participation in the new loan.
The new line for which the s30.000,000
loan is being arranged will run from
Hankow to I-Chang, thence to Chung
King and Chung-Tu in the province of
Szechuen. 1t is estimated that this
province contains a population of sew
| enty millions
! There is some question as to the
| Chinese attitude in the matter. some op-
position having developed in that coun-
! try. it is said.
The controversy over the placing of
! the loan for the construction of the
Hankow & Szechuen Railroad has been
! going on ever since last spring. The
chief cause for delay has been Ger
many's unwillingness to admit the
/ United States to an equal share in the
loan. Under the terms of the original
. agreement, announced on June 6. each
country furnishing the capital for the
. railway was TO have charge of the work
! Of constructing a proportionate mileage
of the road. This would have distrib-
uted the work equally among France,
Germany and Great Britain, the original
/ participants in the loan.
SECRETARY KNOX'S SUCCESS.
AS soon as Secretary Knox was ad-
vised that China intended to borrow
s27, 100000 for this purpose he insisted,
at President Taft's direction, that the
! United States should have an equal
share in the loan. In thus dividing the
sum into quarters instead of thirds the
share of each would have been reduced
! from about s9,O0O,O00 to less than 81,
100000
France and Germany at once protest
! ed against the reduction of their share
! of the loan. Great Britain also opposed
the admission of the American bankers.
on the ground that negotiations with
China had been practically concluded
and to reopen them would probably pre-
vent the consummation of the loan. So
urgent was President Taft, however that
/ he sent message direct to the Prince
! Regent in behalf of the bankers Of this
! country and received in reply from the
Regent assurance that Americas equal
share in the loan would be favored by
China.
NEW AGREEMENT MADE.
Accordingly, a new agreement was ar
ranged by which the loan was increased
! to $50 100000 and the United States ad-
! mitted to a quarter share. BY these
terms Americans were tC have equal op-
portunity TO supply material for both
the Szechuen and the Canton lines and
the branches, and to appoint subordinate
/ engineers and have also one-half of all
future loans of the Szechuen Railroad
and its branches, with corresponding ad-
vantages When the subject of future
loans came up, however, the powers
| again objected. Germany at length
sided for a time with America, but Great
| Britain held aloof. Then it was under
| stood that the reverse was true. So the
deadlock between these two powers
dragged out proceedings. Affairs were
further complicated by a report that
Russia also was to demand a share
! Moreover. the loan was thrown into still
greater jeopardy by the fear on the part
of the Chinese that the powers were
seeking return to the sphere of in
fluence" policy. Finally, late last No
vember, when it seemed that by conces-
sions on all sides an agreement was to
be reached, the French bankers, who had
hitherto taken little part in the contro-
| versy, caused further delay by insisting
that each nation should have an equal
share in construction.
The Hankow- -Szechuen Railway is des-
| tined to develop the great trade of the
Yangtze Valley. 1t will tap the heart of
China, connecting with the north and
south lines from Peking to Hankow and
! from Hankow to Peking, and running I'D
the YangtSekiang Valley 10 Cbepgt,,