Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1913-03-20
Bankers Lose All Interest in the
Chinese Loan after Viii
son S Statement.
DID NOT SEEK own PROFIT
Meant to Help Government Car
ry Out a Practical Applica-
ton Of the Open Door
Policy

Policy"
New York. March 19-As a res,ilt of
tho statement by President Wilson yes
terday that his administration would not
| request the American bankers hereto
fore interested in the negotiations for the
lsiX-power loan to China to continue to
lscck their share of the loan, the three
,hanking houses in the so-caled Amcri-
lean group tonight announced their entire
Withdrawal from the loan negotiations
| The announcement followed a confer
ence Of the banking interests concerned
at the offices of J. y. Morgan & Co. In
concluding their statement. which re-
views In considerable detail the course
of the negotiations begun under the Taft
administration. the bankers say:
AS 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 50 requested. But de-
ferrng to tho policy now declared the
group has withdrawn entirely from the
Chinese loan negotiations and has so
! tbNlSth llle European anu JdI'dntSf DH'lk-
| ing groups"
! beginning with their explanation "
how the American banking interests be-
came interested in Chinese loan negOtia-
tions, the statement says:
THE American group, consisting Of
j. =. Morgan & Co. Kuhn. Loeb & Co,
the First National bank and the Ma
tional City bank was formed I'm the
!
sire of the department of state that
| financial group he organized to take
up the participation to which American
capital was entitled in tho Hukuang
railway loan agreement. then under
negotiation hy the British, French and
German banking groups.
GUARANTEE OF INTEGRITY
This group thus became intercstel
in Chinese loan matters not primarily
| for It's own profit, but for purposes in
| dicated by President Taft and Sccre-
tary Knox. As stated in President
raft's message to Congress of Decem-
Der, 1909, these purposes, in effect,
! called for the corporation of the bank
ers as the Indispensable instrumental
| lity' which the American government
needed to enable IL TO carry out a prac-
teal and real application of the open
door policy The department of state
considered that American co-operation
with the banking groups of the sew
eral great powers enabled the United
states to exercise "A practical voice in
Chinas affairs, and constituted the
best guarantee for the preservation Of
Chinas integrity.
| In pursuance of the policy so advo-
Gated, 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 Fchrury, 1912. these four
groups at the request of their rcspcc-
tive governments and with the con-
sent Of the Chinese governments adj
mltted Russian and japanese finan-
clal groups to the negotiations for the
reorganization loan. thus constitut-
ing what has since been known as
the siX-power group.
Following the revolution and des
pite the fact that the authority of the
new republic had not been generally
| accepted, the American group Joined
with the other groups in making the
provisional government substantial
advances to enable It more firmly to
establish its authority anl to restore
normal conditions throughout the
country.
| AGREEMENT READY TO SIGN
| Meanwhile there had been in nego-
| tiation, during period OF many
months, n loan agreement which. in
its general terms. appeared last month
to meet the approval OF the six gov
ernments, of their banking groups
and the Chinese government and to be
ready for signature.
These terms were intended 10 cover
two points. The first was to enable the
Chinese government to reorganzc its ad-
! ministration on an effective modern basis
to pay off its large outstanding debts ana
to build up Chinese credit. The second
was to protect the interests OF American
and European investors. For such protcc-
| tion, In the judgment of the governments
and the groups, the only method was
to ensure, despite any possible rec ourrence|
of political unrest in China, tho proper
expenditure of the funds loaned To- China
and to safeguard the handling OF the
revenues pledged for principal and inter
est of the bonds
"As announced in the statement given
to the press yesterday, the present admin
stration at Washington, with n desire to
be Of assistance to china and to promote
American interests in tho Far East has
decided that these purposes may better
be served by the adoption Of different
and independent policy"
ACTION SURPRISES BRITAIN.
London, March l9-The announcement
OF President Woodrow Wilson that his
administration had declined 10 reuuost
the American bankers of the six-power
group to continue their negotiations in
connection with the N25.0OoOoo loan To
China, came as a complete surprise to
the British government
There has been a good deal OF dissat.s-
faction in London with the loan negotia-
tions. for exactly the same reasons that
President Wilson gives for tho with
drawal Of the support OF the United
} States Those publcists and papers which
have beon opposing Great Britains AID