New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1916-08-04
Negotiations Broken OF,
Is Announcement of
N. Y. Syndicate.
BLAME is LAID ON
STATE DEPARTMENT
Support Asked For Was With.
held, Financiers
Declare.
Iron Tho Trfhuns Bureau ]

Washington, Aug. 3.-Negotiations
for the floating Of Chinese loan OF
from $50 1000, 900 to 100000 by a
syndicate Of New ork bankers, which
have been in progress through the
State Department for several months,
have now peer definitely abandoned, it
was announced here to-day. Both
bankers and the department had
reached such an impasse that hope OF
reaching an agreement has been given
up-at least by the fnanciers-ss i'm
possible.
The bankers notified the State De-
partment to-day that they had decided
any immediate advance on the securi-
ties offered would not be q profitable
investment in view Of the condition OF
the loan market and the attractive OPP
portunitie5 for placing loans in Europe.
The group of banking houses ap-
preached in the negotiations, which
consists Of J. P. Morgan a Co. Kuhn;
Loeb e. Co., the National City Bank and
the First National Bank. previously had
indicated that they were entirely will
ing 70 make the loan.
State Department Notified.
A letter to the State Department to-
day reversing that decision was no.
made public, but il is understood the
change Of plans resulted from a closer
investigation of loan conditions and me
unwillingness Of the Chinese govern
ment 70 offer any other security than
Chinese treasury notes. The amount
asked for Immediately was S5,OOO,O0o'
but the counter proposal OF the New
York group contemplated an advance OF
only 100000.
Discussion Of the terms OF the pro-
posed loan-or loans, for there are two
SEPARATE transactions involved-has
been guarded with the greatest secrecy
by both sides. Neither has been will
ing 10 assume the entire responsibility
necessary 70 bring about its success,
and neither, as il develops to-day, Is
willing TO be blamed for its failure.
Two versions of the ending of the
negotiations are given.
Bankers, according 70 State Depart
ment officials, have never been enthu-
siastic about making the loan 70 CHINA.
With the rates obtainable for money, It
was felt their funds could be more
proftably employed than in the East.
In addition, they desired to make the
loan an international affair, following
the lines of the original six-power loan
agreement. The State Department.
owing 70 the situation abroad and the
necessity of maintaining scrupulous
neutrality, was unable 10 aid them IN
ard Tho hapkara refused 10
further.
Bankers Side of Case.
In the letter received to-day, IL is
learned, the bankers disclaim any re-
sponsibilty for the failure OF the nego-
tiations. and, in fact, that they are per-
fectly willing 10 proceed with the loan,
if asked by the State Department"
They maintain, it is understood, thai
the Administration, which asked them
TO undertake the business, Is unwilling
to aid them with any assurance OF sup
port in case the risks which they are
compelled 70 assume in making the loan
should come TO pass. And without the
assistance Of their own government II
would be impossible 20 press any claim
in case of China's default. Therefore
the loan was not looked upon by the
banks as sound.
Somewhere between these two posi-
tions-no one outside the two parties
concerned knows exactly where-lies
the real reason for the failure OF the
negotiations. Persons who have been
familiar with the foreign policy OF the
Wilson administration, however, are In
clined to be more in sympathy with the
banks, and feel they have been merely
further victims of a vacillation that al
ready cost Mexico and Americans hav-
ing relations with Germany and Great
Britain dear. They call il but another
example of the amateur diplomacy
inaugurated with Bryan's entry into the
state Department and inherited by Mr..
Lansing.