Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-01-24
THE REPUBLIC OF CHINA.
IV-THE FINANCIAL CRISIS.
By Frederic ]. Haskin.

The news that the six power group
sometimes called the sextuple group, has
agreed TO give the republic of China
preliminary loan of s125.O00.OOO indicates
the passing of the present financial crisis,
threatening than even politicai
dangers, and signalizes the beginning OF
sane. staple banking practices by the
Chinese government. This. together Win
the fact that the foreign bankers will
loan another sI13,O00,O00 within the next
five years. greatly encourages true
friends of China. even when it is well
known that the Chinese We're Utterly
opposed to the terms of the group and
finally accepted the situation because
there was absolutely other sensible
course open to them.
Great Britain. Germany. France. the
United States, Russia and Japan compose
the six power group. The first loan of
s12J.GOO.OOO is appOrtioned among the
six powers as follows: Great Britain.
s2O,OOO,OOO: United States. $2JO0O.OOO:
France, $2OOOOO0O; Germany s15.O00.0O0:
Japan. $4,000. coo, and Russia. Sl0VGO.oOO.
The remaining 25,OOoOO0 will go to c.
Birch Crisp & Co, London bankers. who
for a. time considered floating the entire
loan on their own independent account.
The most powerful banking interests of
these countries make up the group. and
they have had the firm and constant
backing of their respective governments.
The preliminary agreement just signed
ends the strained relations that have eX-
listed between the provisional republic
of China and the sextuple group since
March IA. 1912. This was due to bad
faith in individual cases and to wide
spread misunderstanding on the part of
the Chinese people. the last named being
excusabe' when their peculiar point of
view is taken into consideration. The
new republic will get per cent below
the sale price of the S1-.,0GO. 900 bond
issue which the international bankers
are to float in its behalf.
* X
In addition. the foreign powers will
formally agree not to press for the pres
ent their claims for
Agree Not to damages caused by
the recent revolution.
millions. as Russia's claim alone is
$4,000. On the other hand. China con-
sents at last to foreign supervision of
her finances by Herr Romp. the Dutch
banker selected by the group. The I'M
Outstanding comes none too soon. for
without foreign aid of the proper sort
lie in the long run.
1t was this question of foreign control
which caused the split and not usurious
demands by the foreign bankers. The
story of the loan tangle in China is an
interesting one. So is a recital of the
events which led the American bankers
to break into the far eastern financial
game. ultimately pulling the State De-
partment in after them. The result so
far has been the material advancement
American interests
grip on the Chinese situation by the |
United States government Critics have
lation of century-old standards. but
friends of the administration hold with
Lowell that Time makes ancient good |
uncouth; new occasions teach new du-
ties"
American financial operations
really national scale began with China |
in the sum- !
Large Operations mer of 1908.
Were Begun in 1908. s shen rang Ti
then governor of Manchuria, agreed to
a loan of $20,OOO.OOO from American
financiers. The money was to found a
great bank which was to back the Chi
nese government in developing the ire
mendous natural resources of Man.
churia. Just prior to this. in May. Con-
gress had authorized the return of Amer
ica'S share of the Boxer indemnity.
Tang Shao vi was designated special
envoy to convey to Washington China
hearty appreciation of this generosity,
but what he was really sent over here
for was the floating of the $4,000 900
Manchurian loan. Mr.. Tang is grad
uate of American college. BY the
time Mr.. Tang reached Washington the
Sao,O0O.OO0 American loan had grown in
his mind to a $500. 100000 international
lean proposition. He proposed to Elihu
United States lead the world into this
loan. to be expended in the commercial
currency and administrative reform of
China.
The matter was referred to j. Pierpont
Morgan and others 1t might have gone
through but for the dismissal by the
prince regent soon thereafter of Yuan
Shih kai. now President of China and |
the country's only strong man at that |
time. Being a lieutenant of Yuan, Tang
Shao vi went out of office with him.
The United States was a party with
China to the commercial treaty of 1903. |
prov i d ms for |
United States Party American assist
to Treaty of 1908. ,j,ion IL, IN tn, the aoo,
tan obnoxious and haphazard internal
system of taxationp. and revision OF the
customs and currency reform. In return, !
China promised that Americans would be |