The Washington herald., 1918-08-26
6-NATION LOAN
NOW 4-NATION
Holland Relates Inside His
tory of Big Money Deal
with China.

AT the State Department in Wash
ington Immediately after the details
were perfected so as to be embodied
in the contract between the United
States and China which calls for
the construction Of ships for the
United States by China, there was
some informal conversation.
The Secretary of State, Mr.. Ian
sing. expressed his qualification that
China should be willing TO utilize
her facilities for the constructor Of
ships for the United States and re-
ferred informally to the fact that
this negotiation made it all the more
convenient or practicable for the
United States to give its moral sup
port to rhe proposition that a loan
OF $50. Oh, 900 should be made by Amer
lean bankers to China.
While the negotiations were pend
ing 1t was Inevitable that some Sc
crecy should b. maintained. Now,
! however. in view OF the completion
OF the negotiation and the beginning
Of the life of the contract, as well
as the perfecting Of the syndicate
to advance 5000. 600 to China, NTH
Of the ban Of secrecy has been re-
moved. Therefore. IL has been ros-
| sible TO obtain from some Of these
who had principa, part in these trans
actions detailed information
The contract whereby China Is 10
buIld at her shipyards at Shanghai
possibly as many as twelve steel
steamships which will average lOooJ
tons capacity each is an entirely diff
ferent matter from the four-nation
loan to which the State Department
Of Washington has given not only i:s
moral support, but much encourage
ment.
The United States Is to pay China,
or to pay for material furnished TO
China, the transaction being financed
through the Emergency Fleet Cor
poration. possibly as much as S2a, coo, =
600 A part of this sum has already
been paid, the money being utilized
! for the purchase OF steel and OTTER
| equipment, which will be speedily
shipped across the Pacific to Shang-
hal.
Fifty Million Dollar Loan.
1t was a coincidence in point OF
time that the negotiations for q
loan of S50.OOo.000 to China should
have been under way when the
United States and China were per
| fecting the contract involving, II
executed. the construction Of ships
for the United States in the Shang-
hal yards.
The loan OF $4,000. 900 was, Il
was at first believed, to be made tc
China for the purpose of facilitating
certain industries. transportation
construction and internal improve.
ments.
But very high authority thi.
morning asserted that this is moi
the real purpose of the loan. II
order to understand the meaning oi
this transaction il is necessary tC
60 back TO the days when the so.
called six-nation loan originally
itended to be one hundred and
nifty million dollars was perfected
by agreement with representative.
of Great Britain, France. Germany
Russia and the United States. Aus.
tria was also included. although al
most incidentally.
In 1915, a year or so after thi,
arrangement was perfected, Col
William J. Bryan. then Secretary o.
state. deemed il inexpedient for tn,
State Department to give its mora
support to the American syndicat,
headed by Henry p. Dawson which
participated in the loan. Therefor,
il became necessary for the Amer
ican syndicate to withdraw from
this arrangement That left Ger
many. Russia, Austria, Great Brit
ain and France as the nations
which participated. or were to par
ticipate. in the loan to China.
How China Felt About IL.
There was in China some misun
derstanding with respect to the new
attitude of the American govern
ment towards this siX-nation loan
However. the situation was full,
explained to the Chinese govern
ment and whatever feeling of re
gret or suspicion may have beef
occasioned at first by the with
drawal of the United States from
the six-nation loan was removed
After the war began and especial
ly after the United States becam
one of the allies. the feeling Il
China, which had also entered tn
war upon the same day the Unite,
states did, was almost unanimou
that Germany and Austria shoul,
no longer be regarded as partic
{ ipants in the six-nation loan. How
ever. in order to act fairly and re
move any possible misconstructiol
of China's purpose it was deeme
highly expedient that a new ar
rangement should be perfecte
Whereby China could receive none
enough to take care of that porto
Of the six-nation loan which wa
represented by Germany's and Rus
sia's interest in the loan.
This was the proposition whic
was laid before the State Depart
ment and to which the America
bankers gave serious consideration
. 1t was, however. deemed OF the nj
most Importance that the Unite
States or the syndicate of America
bankers should not exclusively /
associated with the loan of $4,000
] o0e to China.
There were po1ieal and diDi'