The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1912-03-21

went to China, just after the Chinese
japanese war, for the purpose of sc
! advising China as to prevent the par
| tition of her territory, then it was es-
! sential that the United States be per
| mitted to participate in any imperial
| loan made by China.
The details of the manner in which
Mr. Knox handled the proposition
will probably not be made public I'M
| til long after he has retired from the
state department, but that he did han
die it firmly and with great tact is
well known, and he so handled it that
asked to participate in the loan upon
equal terms with Great Britain,
France and Germany. This loan has
already become historic and is one of
the finest examples of what is meant
by the term dollar diplomacy
They Are SuIlIy.
A few days ago dispatches were re-
ceived in this city from Pekin init
mating that the International group of
bankers with which China negotiated
the loan of thirty millions had become
sulky because the new and first pres
ident of China, Yuan, had accepted a
loan of five million dollars from Eng
lish and Belgian bankers. This loan
is understood to have been made upon
the security of a one year note and is,
therefore, apparently an emergency
loan.
So far as the American bankers who
are associated in the so-cal1ed four
power loan are concerned, the term
''sulky" is inaccurate. These bank
ers however, do feel that the action
taken by President Yuan entails some
explanation and here is no doubt that
it will be received and will prove to
be satisfactory. At all events, the in
cident in no way impairS the value of
the diplomatic work done by Secretary
Knox when he practically compelled
the participation of the United States
in this loan.
rotary Knox learned, have been now
for some years in a condition in which
some men have found themselves who
have invested all their money in unim-
market and who were called land
poor Every one of these states is
rich, and some of them are enormous
ly rich, in natural resources. And yet
Honduras bonds have frequently been
enumerated in what are called the
for years practically bankrupt. The
"cat and dog" lists. Practically all
of the credit which was in them when
they were issued is destroyed.
That also was. some years ago, the
condition of the republic OF San Do
mingo. 1t had no credit, it had prac-
tically no fiscal system, and yet it was
very rich in certain kinds of natural
resources. In the administration of
President Roosevelt, and as a last re-
sort, arrangements were made where
u
nanced, Americans were put in charge
of the custom houses for the pupose
of ppropriating the receipts in such
manner that San Domingo could re-
ceive a fair proportion so that the ex-
penses of the government could be
met while the rest was sequestrated
in such a manner as to give assurance
that the interest upon the debt would
be paid promptly and a sinking fund
provided whereby the principal could
be met when due.
The plan worked so well in San Do
mingo that Mr.. Knox felt assured that
it could with equal success be adopted
in some of the Central American
states. Mr.. Morgan, in association
with some international bankers. stood
ready to refinance the debt of Hon
duras provided only the senate of the
United States would ratify treaties
whereby Secretary Knox could be au-
thorized to appoint American citizens
to take charge of the customs receipts.
Two years ago, just before Mr.. Nor
gan went to Europe, he visited Wash
ington and had a long conference
with Secretary Knox. Mr.. Morgan
then went to Europe confident that
the treaties would be ratified. But
his confidence was misplaced and the