Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-01-25
THE REPUBLIC OF CHINA.
V-CONCLUDING THE LOAN
BY Frederic ]. Haskin.

Before replying to the proposal of
Premier Tang Shao vi to float a loan of
S'p.o0coO the six-power group looked
the situation over carefully. for it must
be remembered that they are bankers
and business men. Despite the chaos
that prevailed in China. regardless of the
nebulous form of its government. they
had been asked to lay a bond-selling
proposition before the world In the first
place. while prepared to advance sums
from their own strong boxes, under GER
tain conditions. they deemed it very I'M
wise to even attempt to sell new Chinese
bonds at that time. They would have
been sold so low that other Chinese bonds
already on the market would have
slumpcd.
IL the group undertook to advance a
large amount of money Immediately they
would have had to discount treasury
bills These they would have been forced
To keep or try to sell to such few clients
as would take them. AS to the salt
Isabelle. the bankers held that it would
be safe security only when administered
by foreigners The annual returns from
this salt tax are estimated at 10000 900
per annum. whereas under foreign con-
Irol IL could amount to at least twice as
much.
After the relief Of Picking in 1898 a
provisional government of foreigners was
organized to direct the affairs of the city
81 I1entsin until order should be restored.
The French consul general was chairman
Of this civil commission and the secretary
was MIR. DENLY, the American consul
general Under this foreign administra-
ZION one station turned in as much from
the salt tax In six months as the whole
district did in a year when the Chinese
were in control A similar experiment
was tired at Tsingtao. and the receipts
were SIX times as much as they had been
Before in the same length of time.
Consequently the six-power yroup de-
cidcd that the huge loan Tang Shao re-
quested could
4eImS Uecl0e0 he given only
by Six Power Group. inr ' tsrm ro'0"
First. that the group should have the
right TO satisfy as to the purposes for
which funds were required
Second. that China should itself create
"A system of audit in which foreigners
should be employed with powers not mere
ly advisory, but also executive so as to
insure the effective expenditure of funds
borrowed for the purposes specified
Third. that the salt taxes to be hypothe-
Gated for the service of this loan should
be administered either by the existing
maritime customs organization or by a
separate Chinese service like the customs
however. under foreign direction. thus
Safeguarding the proper administration
% the security despite the possible con-
tinuation or recurrence of unsettled con-
dtions in China
Fourth, that the group should take the
first series of the loan of $500. 600 GOO at a
liked price. and should be assured an
option on the subsequent series at a price
Ia be based on the market quotation of
the first issue. thus giving China the
bcneft OF any Improvement in her credit.
Fifth. that to protect the quotation of
bonds issued and to assure a successful
marketing of subsequent series, China
should not borrow through other groups
until after the entire loan Of $500 600 600
mad been issued.
Sixth. that for 4 period of five years
China should appoint the group, its imam
cial agents to assist the administration in
its work Of reorganization.