The Daily Missoulian. [volume] (Missoula, Mont.) 1904-1961, 1913-01-20
The Republic of China
IV.-The Financial Crisis.
BY Frederic J. Haskin

1910, saw the entrance of America into
the arrangement, which was there
after referred to as the four power
group.
During the late revolution both
fused financial aid by the four power
group, as their governments were n
xious to preserve strict neutrality. On
February rs, 1912, however, by which
time it had been settled that a re-
publican form of government would
be tried with Yuan Shin Kai as pro-
visional president, Tang Shao VI held
a conference in Picking with the bank
ers. He asked for a loan of $500, 0O0,-
900, offering official revenues as Sc
curity, the loan to be in five annual
payments of $50. 600, 900 each. He also
asked for some money to meet the
crisis at Marking, and on the follow
ing day $1,20O,000 was advanced at
Shanghai for the Marking authorities
Another 100000 was given Picking au-
thorities on March 9. the day before
Yuan Shin Kai was inaugurated. On
the same day the group signed the
agreement to see China through it's
difficulties, ever to paying Chinese
loan interest coupon charges, and in
turn the Chinese government prom
fsed the group an option on the big
loan, providing the terms were as good
as could be obtained elsewhere.
The next day. when Yuan Shin Kaj
became president, Tang Shao VI was
made premier. He had already in
duced the GROUP to advance 81, 800. 900
and knew that they were preparing to
take care of the entire $500, 900, 900
project at his %instigation. Yet at the
same time he was secretly negotiating
a $4,000, 900 loan from a Belgian syndi-
cate. And five days after the agree
ment with the four power group had
been signed he closed with the Bel
gians, got the IS, 600. 900, promised an
option on further loans, and offered
as security the earnings of the Pek-
ing-Kalgan railroad, Notwithstanding
the fact that the earnings Of the same
railroad were pledged in 1905 as se-
curity for the Anglo-French loan Of
that year. The Belgians did not pay
terms as high as the group offered.
but they waived the foreign audit and
supervision proviso which the group
insisted. Tang her hurried to
Marking and indlced the quasi-legal
advisory council to approve the Bel
gian loan. 1t has been generally be-
lieved that he did not inform that body
of his dealings with the group
A protest was made 10 days later
by the British. French. German and
American ministers. The explanation
of misunderstanding was rejected.
and negotiations were not resumed
until the government admitted formal
ly in May that a breach of faith had
been committed. In that month and
the following the group advanced the
sum Of $4,000, 900 to the republic. On
June 20 the Belgian syndicate, repre-
scented by the Russo-Asiatic bank, was
absorbed by the international bankers
as part Of the arrangement which took
Russia and Japan into the affair,
which then became the all-powerful
six power group The Yokohama
Specie bank was designated as Japan's
fiscal agent.
Premier Tang now asked for &c.
500, 900 per month for six months to
meet pressing necessities such as long
overdue payment of thousands Of
troops, provide the expense of honor
dDly ulSCndISiNS d great portion tHeTe-
of, necessary repairs to public institu-
tons and the current expenses of the
government. The big loan proper was
to be reserved for the payment of the
Boxer indemnity, which was long due.
the interest o. outstanding bonds, also
in arrears, the redemption of the
treasury bills and other administrative
measures. A goodly part Of the big
loan vas also to be used, If Mr..
Tang's plan had been followed, to
make up for the loss of revenue
caused by the abolition of the likin,
which he proposed to do at ono Sc
curity for this vast sum of money, to
be expended, 1t appears. without Off
cial supervision by the bankers who
were asked to loan it was offered in
the form of the salt gabelle, or salt
excise tax. The premier's plan vas
rejected by the six power group, who.
however. after long elaboration in
Picking, Paris, London and New York
made a COUNTER proposition to the re-
publican authorities at Picking in July.
Tomorrow-The Republic of China.