The Sentinel=record., 1913-03-20
WANTED FEDERAL BACKING
Failure of Wilson and His Cabinet to Request the Loan Will Leave United States Out of the s
 Deal Entirely.

of the statement by President Wilson yesterday, that his administration would not request the American bank. CTS, heretofore interested in the six power loan to China, to continue to seek their share. the three banking houses in the so-called American group, tonight announced their entire withdrawal from the negotiations. z The announcement followed a con- ference of the banking interests con- cerned at the office of J, P Morgan and company. In concluding their statement which reviews in consider able detail the negotiations begun un- der the Taft administration, the bank CTS say:
 As the American group had been ready to serve the administration in the past, irrespective or the heavy risks involved. so it was disposed to serve the present administration if requested. but deferring to the policy now declared, the group has with drawn entirely from the Chinese loan negotiations and has so advised the European and Japanese banking groups" Beginning with their ex. planation of how the American bank. ing interests became interested in the loan, the statement says:
 .The American group consisting oi J. P. Morgan and company Kuhn Loeb and company, the First National bank and the National City bank, was formed in the spring of 1909 upon the expressed desire of the department of state that a financial group be or ganized to take up the participation to which American capital was enti- tied in the Hu Kuang railway loan agreement then under negotiation by British, French and German bankers
 This group thus became interested in Chinese loan matters not primar- fly for it's own profit, but for purposes indicated by President Taft and Sec retary Knox. As stated Tn President Taft's message to congress of Decem- ber 1909, these purposes in effect called for the cooperation of the bank CTS as to the indispensable instru- mentality which the American gov ernment needed to enable it to carry ont a practical and real application of the open door policy The depart ment of state considered that Ameri- can cooperation with the banking groups of the several great powers enabled the United States to exercise a practical voice in Chinas affairs and constituted the best guarantee for the preservation of China's integ- rty.
 ''In pursuance of the policy so ad- vocated, the American group with the approval entered into an agreement with the British, French and German groups for the purpose of rendering financial assistance to China. In February 1912, these four groups at the request of their respec- tive governments and with the Chin ese government admitted Russian and Japanese financial groups to the nego- tiations for the reorganization loan, thus consisting 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 has not been generally accepted, the American group joined with the other groups in making to the provisional government substan tial advances to enable it to more
 firmly to establish its authority ana to restore normal conditions in Chi
 na.
 Meanwhile there had been in nego tiation during a period of many months ,a loan agreement which, 1T it's general terms appeared last montf to meet the approval of tne six gov ernments, of their banking groups and the Chinese government and tt be ready for signature"
 These terms were intended to GOV. CT two points. The first was to en able the Chinese government to re organize it's administration on an ef fective modern basis, to pay off its large outstanding debts and to built up Chinese credit The second wal to protect the interests of Americar and European investors. For suci protection, in the judgment of tht governments and the group the onl,
 method was to ensure, despite any
 possible recurrence of political un
 rest in China, the proper expenditure
 of the funds loaned to China and ts
 safeguard the handling of the reve
 nues pledged for principal and inter est.
 As announced in the statement giv en to the press yesterday, the presen' administration at Washington with