New-York tribune., 1918-06-28
Morgan Confers With Ad-
ministration on Plan to
Advance $50,00O,OO0
Want Japan's Help
Bankers Would Also Require
Government Guarantee.
Regardless of Collateral

ChlHa urgent need Of funds has re-
suited In the opening of negotiations
between the State Department and New
York bankers with the view of obtain
ing S5o.ooo,ooo loan for the Far East
ern republic. At conference in Wash
lngton Wednesday, called for the pur-
pose OF discussing a tentative plan. J.
T. morgan was present ss the repre-
sentative of the New York financial in
s1ltutlons that were in the five-power
group which offered to lend China $685.
ooo,oOo in 1918, but were prevented
from doing SO by the attitude of the
wilson administration in reversing the
policy favored by President Taft.
While the present administration
new shows disposition t. reverse its
former policy in regard to China's f.
RANGING, the position of New York bank
ers apparently remains the same. That is.
chey would refuse to undertake to raise
any large loan without this eovern-
ment's guarantee that the advance
would be met at maturity, regardless of
"hat collateral the Chinese government
might have to offer.
Want Japan's Co6peration
from information obtained here yes-
terday 1T also appears that bankers
will consent to aid in ..aie;nr
Tor Chlna's industrial and financial re-
na"''i'a''on only on the condition that
Japan Is partner in the transaction
'apan's interests in China. ban,ers COW
are so intimate as to reon;re h.
cooperation in any loan enternr;se 7A
IL is also understood 20 be tha ,,;o1,,
rot only OF the State Department bnt
oi bankers as we'll, that # the neeotia.
.lons JUST opened are carried to n sue
cess1ul conclusion the participation in
Ihe American end of the loan sbonld
De natlon-wide. Chicago, it is thought
would be made the centre of what aid
would come from the West
IN the fail Of 1916 the Continental
ana aa commercial Trust and Savings
,'a.f, nai!k OF CElcago, headed syndicate
Gh1eso Ghi1e advanced dsn',S5 s55,(ooo,ooo to the
were three times the amount nf tho
issue Although this ,oar had tho
approval OF the State Department it
vas protested by the British, French.
RUSSIAN and Japanese bankers of the
GuihIupIe group, who sent a letter to
the Chinese Minister of Finance saving
1oas the loan violated Article II. Of the
reorganization loan agreement of ApriI
Ae. l9l3: The letter declared the loan
vas polltlcal and not Industrial.
Ihe answer of the Chinese Legation
q! washington. was that every precau-
tlon had beer taken before the loan
vas cdnsummated not to violate anv
agreements, and that both the Pekinp
Foreign Office and the State Depart.
ment OF this country mad considered
all phases OF other contracts. John
Jay Abbott, vice president of the Chi
cago bank, in statement concerning
tne protest Of the tive-power group. de-
c!ared that the loan was purely for in
dustrlal. and commercial purposes.
Has Sought Funds Here Before
Since the beginning of the war with
Germany China has made MANY at
1empts to obtain loans in the United
States, but, With the exception of minor
sovancns made bv the American Inter
national Corporation in connection with
its engineering projects in the Far East
and the loan from Chicago. it has met
with no success. In June, 1916, loan
of $3oooo,ooc was sought, but the the
negotiations never reached definite
conclusion.
One of the objections If the Wilson
administration to American participa-
ton in the original five-power loan was
that all the foreign governments whose
bankers were participants would have
a certain supervisory power over
Ghinese government finances. The
Sf1tnc
China should be permitted to exercise
entire supervision over her own affairs
and declined to be party to any agree
ment that would be contrary to that
principle. This objection was again
brought forward in the negotiations
over the 100000 loan. '"S'0''' >
The American group of bankers that
participated in the five-power negotia
tions included J. P: Morgan & Co.,
Kuhn. Loeb Co., the First National
Bank and the National City Bank.