The Daily Missoulian. [volume] (Missoula, Mont.) 1904-1961, 1913-01-20

The news that the six power group,
sometimes called the sextuple group
has agreed to give the republic IT
| China a preliminary loan of $685.
present financial crisis, more threat
ening than ever political dangers, and
signalizes the beginning Of sane, stable
banking practices by the Chinese gov
eminent. This, together with the fact
that the foreign bankers will loan an
other s175,O 900, goo within the next five
years, greatly encourages true friends
of China, even when it is well Known
| that the Chinese were bitterly OPP
posed to the terms of the group, and
finally accepted the situation because
there was absolutely no other sensible
course open to them. :.
Great Britain, Germany, France, the
| United States, Russia and Japan COM
pose the six power group. The first
loan of $685. 900, 900 is apportioned
among the six powers as follows:
Great Britain, $40, ZOO, 600; the United
States, $25, 900, 900; France, $4,000 900;
Germany. SIS, 900, 900; Japan, $780,
900, 900. and Russia, $40, 200, 000. The
remaining s25, 900, 900 will go to c.
Birch Crisp & Company, London
bankers. who, for a time, considered
floating the entire a IN their w
independent account. h most pow
erful barking interests Of these u
+,;oc ~,olyo IN tho prnlJn and thew
have had the firm and constant back
ing of their respective governments.
The preliminary agreement just signed
ends the strained relations that have
existed between the provisional repub-
lie of China M the sextuple group
since March IA, 1912. This was due
to bad faith in individual cases and
to widespread misunderstanding on
the part of the Chinese people, the
last named being excusable when their
peculiar point of view is taken into
consideration. The new republic will
get six per cent below the sale price
of the $125,O00, 900 bond issue which
| the international bankers are to float
in it's behalf. In addition, the for
eign powers will formally agree not
to press for the present their claims
| for damages caused by the recent
revolution, amounting to several mil
lions, as Russia's claim alone is
s525,OOO. On the other hand, China
consents at last to foreign supervision
of her finances by Herr Romp, the
Dutch banker selected by the group.
The understanding m none too
soon. for without foreign aid of the
proper sort there would have been no
Chinese republic in the long run
1t was this question of foreign con-
troll 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 department in after
them. The result so far has been the
material advancement of American in
~terests and a stronger grip on the
Chinese situation by the United
States government. Critics have called
this dollar diplomacy" n a viola
ton of c~entury-old standards, blu
friends of the administration hold with
Lowell that thine makes ancient good
uncouth; new occasions teach new
duties"
American financial operations on a
really national scale began with China
in the summer of 1908, when Tang
Shao vi, then governor of Manchuria
agreed to a loan of $50, 900, 900 from
American financiers. The money was
to found a great bank which was tc
back the Chinese government In de
veloping the tremendous natural re
sources of Manchuria. Just prior tt
this, in May, congress had authorized
the return of Americas share of the
Boxer indemnity. Tang Shao vi wa:
designated special envoy to convey II
Washington China's hearty apprecia'
ton of this generosity, but what hi
was really sent over here for was the
floating of the $40, 600, 900 Manchuriar
loan. Mr.. Tang is a graduate of ar
American college. BY the time Mr.
Tang reached Washington the 800,
O0O, 900 American loan had grown ir
his mind to a $500. 600, 900 international
loan proposition. He proposed tt
Elihu Root, then secretary of state
that the United States lead the world
in this loan, to be expended in tn
commercial, currency and administra
tive reform of China. The matter wa!
referred to j. Pierpont Morgan AM
others. 1t might hav gone through
but for the dismissal by the prince
regent soon thereafter of Yuan Shil
Kai, nov president Of China, and tn
country's only strong man at tina
time. Being a lieutenant of Yuan
Tang Shao vi went out of office will
him.
The United States was a party will
China to the commercial treaty 0
1908, providing for American assist
ance in the abolition of the likin (al
obnoxious and haphazard internal sys
TEN of taxation) and revision of thu
customs and currency reform. In re
turn, China promised that Americans
would be permitted to put up one-hal
of the capital in the Canshudean o
the HankoW- Szechuan railway line
the other part" hei'g Great Britain
But in May, 1892. the American in,