New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-09-30
Breaking Up of Quintuple
Group Likely to Cause
Financial Chaos in ORR
entail Republic.
CIVIL WAR Is FEARED
Scramble for Concessions by
Foreigners May Rival Period
of 1897 and 1898-Bel-
gian Grants Hasten Split
Japan Displeased.
Iron The Tribune Bureau

-
the British governments support Of the
British unit Of the so-called quintuple
group in China-which was sextuple
group until the withdrawal Of the
United States last March-excites keen
interest. and enough is known Of past
events and the background of the gem
eraI situation for officials 10 divine the
reasons which actuate the British gov
eminent in this step.
For many months there has been a
rowing dissatisfaction in England
NTH the working of the quintuple COM
bination. This consortium was com
posed Of groups of leading financial in
stitutions of England, France, Ger
many, Russia and Japan. Formerly
an American group, consisting OF J. j.
Morgan & Co. Kuhn. Loeb * Co, the
National City Bank and the First Ma
tional Bank, Of New York, were par
titipants in all the business procured
by the big group, but when President
wilson refused TO give further diplo-
matte support to the American group
il withdrew from the combination.
The group was formed primarily for
financing the new Chinese government,
and last spring, after negotiations last
ing more than a year, a loan agree
ment was reached. BY it China was
10 receive S12j.OOO,OOO for reorganiza-
ton purposes.
Five Powers Had Monopoly.
During the long, tedious and unsatis-
factory negotiations for this loan the
FIVE powers involved had a monopoly
on Chinese business. Their financial
control Of the worlds bourses was such
as 10 make it impossible for China 10
get the required funds from any one
who was without the diplomatic sup
port Of the five governments. Further
more, the Chinese government had
agreed 10 deal with no one else. An
other part of the agreement was that
the five powers should act together IN
their financial dealings with China.
II appears that this last provision
has, in spirit at least, been broken. for
there is strong suspicion that France
and Russia are behind two great rail-
way concessions recently granted TO a
Belgian syndicate through the Banque
Sino-Belge, a financial institution def
nitely known 10 have close affiliations
With the Russo-Asiatic Bank, which
appears as the Russian member Of the
quintuple group and which, in turn,
has close financial affiliations with
France.
Even If this suspicion that France
and Russia have been stealing march
on England were not true, the mere
fact that the Belgians have procured
the two greatest railway concessions
ever given by China, and all within
twelve months, while English bidders
had their hands tied because England
is bound 10 live up to her obligations
10 her Quintuple group colleagues, is
enough in itself 10 have forced England
virtually to dissolve the group by with
drawal
Dissatisfaction in England.
There has been great dissatisfaction
in England with the working Of the
combination and considerable criticism
OF the policy in Parliament, where the
government has been fiayed for giving
its. exclusive support to the Hong Kong
and Shanghai Bank, composing the
British unit. This criticism was par
ticularly keen last year when the Brit
ish governments refusal 10 sanction
the so-called Crisp loan TO the Chinese
government resulted in the failure of
that British enterprise.
Although the reasons for the action
Of the British govern ent are interest
Ing, the possible results are Of far
greater Importance and involve the
very future Of China.
In China, as has been frequently
pointed out by correspondents Of The
Tribune, conditions Of corruption, nal
administration and inefficiency the
latter growing out Of inexperience
under a republican form Of govern
ment. are such as to make the lending
Of money TO the Chinese government
unsafe unless there are adequate guar
antees not only OF repayment of the
money borrowed, but Of the honest OK
penditure Of the money lent for Inc
purposes for which it is borrowed.
AS long as the international combi-
nation hung together these conditions
were resolutely imposed. and CHINA
was finally compelled 10 accept them
with reluctance. Thus %l2J.OOO.UOO
was procured for reorganization pur-
poses The proof of the necessity OF
supervision Of expenditure has been
shown by this very loan, for in spite
Of all the precautions taken in the loan
agreement the Chinese have failed TO
fulfil a considerable part Of their obi
cations in the matter. BY the end Cf
this year the proceeds Of that loan will
nave been expended and China viii be
again in dire need Of money.
Scramble for Concessions.
The breaking Of the power OF the IN
.ernation consort.um will lead direct
~ 10 a scramble for concessions by Tor
signers which will no doubt rival me
,oncessiop hunting neriod Of 1881 and