The Birmingham age-herald., 1913-03-20
AMERICAN BANKERS
NOT TO CONTRIBUTE
TO THE CH|NESELOAN
Action Follows Refusal OF
the Administration to
Request Loan
READY TO SERVE
ADMINISTRATION
Bankers Issue Statement EmbOdying
Views in Negotiations-Inter-
ested Not Primarily
for Profit

New York. March 1a.-As result of
the statement by President Wilson yes
terday that his administration would
not request the American bankers
heretofore interested in the six
power" loan to China to continue to
seek their shares. the three banking
houses in the so-called American group
tonight announced their entire with
drawal from the negotiations.
The announcement followed con-
ference of the banking interests con-
cerned at the offices of J. P. Morgan
& Co. In concluding their statement,
which reviews in considerable detail
the negotiations begun under the Taft
administration. the bankers say:
CAS- the American group had been
ready to serve the administration in the
past irrespective of the heavy risks
involved, so it was disposed to serve
the present administration If request
ed. But, deferring to the policy now
declared the group has withdrawn en-
tirely from the Chinese loan negotia-
tions and has so advised the Euro
pean and Japanese banking groups
Gives Out Statement
Beginning with their explanation of
how the American banking interests
became interested in the negotiations,
the statement says:
'7rhe American group, consisting of
J.. p. Morgan & Co., Kuhn, Loeb &
Co., the First National bank and the
National City bank. was formed in the
spring of 1909 upon the expressed de-
sire of the department of state that a
financial group be organized to take
up the participation to which American
capital was entitled in the Hukuang
railway loan agreement, then under
negotiation by British, French and Ger
man banking groups.
This group thus became interested
in Chinese loan matters not primarily
for its own profit, but for purposes
indicated by President Taft and Sec
retary Knox. AS stated in President
Tafts message to Congress of Decem-
Der, 1909, these purposes, in effect,
called for the cooperation of the
bankers as the indispensable instru-
mentality which the American govern
ment needed to enable it to carry out
practical and real application of the
open door policy The department of
state considered that American CO.
operation with the banking groups of
the several great powers enabled the
United States to exercise a practical
voice in China's affairs and constituted
the best guarantee for the preserva-
ton OIL emma s integrity.
"Six Power" Loan Group
I'm pursuance of the policy so ad-
vocated. the American group, with the
administrations approval. entered into
an agreement with the British, French
and German groups for the purpose of
rendering financial assistance to China.
In February. 1912, these four groups,
at the request of their respective gov
ernments and with the Chinese gov
ernment, admitted Russian and Japan
ese financial groups to the negotiations
for the reorganization loan. thus con-
stituting what has since been known
as the six power group.
Following the revolution and de-
spite the fact that the authority of
the new republic has not been gener
ally accepted, the American group
Joined with the other groups in making
to the provisional government substan-
tial advances to enable 1t more firmly
to establish it's authority and to re-
store normal conditions throughout the
country.
Meanwhile there had been in nego-
tiation during period of many months
a loan agreement which, in its general
terms. appeared last month to meet
the approval of the six governments of
their signature.
"These terms were intended to cover
two points. The first was to enable the
Chinese government to reorganize Its
administration on an effective modern
basis, to pay off it's large outstanding
debts and to build up Chinese credit
The second was to protect the interests
of American and European investors.
For such protection, in the, Judgment of
the governments and the groups the
only method was to ensure, despite any
possible recurrence of political unrest
in China the proper expenditure of the
funds loaned to China and to safeguard
the handling of the revenues pledged
for principal and interest of the bonds
AS announced in the statement given
to the press yesterday. the present ad-
ministration at Washington, with a de-
sire to be of assistance to China, and
to promote American interests In the
far east, has decided that these pur-
poses may better be served by the
adoption of different and independent
policy.