The sun., 1919-01-09
]. s. BANKERS PLAN
Big LOAN TO CHINA
SAmerican Group" Resumes
It's Negotiations Approved
by State Department.
AMOUNT NOT SPECIFIED
John J. Abbott Of Chicago Will
Go to Pekin to Study
the Situation.

That negotiations looking toward con-
animation Of n loan to China by the
so.called American Group Of bankers had
s.n resumed became known yesterday
when J. p. Morgan & Co. announced that
John Jay Abbott. vice-president Of the
continental and Commercial Trust and
savings Bank OF Chicago. had been COM
missoned to go to China shortly to sur
yey that countrys needs and to report
on financial conditions there. The mis-
don has been approved by the State
Department at Washington.
While no specific loan Ia said to be
under consideration II Is believed that
Mr., Abbott will act as the medium be-
tween the borrowers In China and the
bankers here and that as soon as the
essential needs are checked up loan OF
relatively large proportions Will be ne
gotated. The news that negotiations
regarding a loan to China had become
active again was contained in the fol-
loving announcement made yesterday
by J. P. Morgan & Co.
The American Group. which was
formed few months ago, has. with the
approval of the State Department. de-
dded to send a representative TO Pekin to
study the situation in China and to re-
port on conditions there. No specific
loan is now under consideration. John
Jay Abbott vice-president OF tho Con-
tinental and Commercial Trust and Saw
inss Bank. Chicago. has been selected
for this mission and ne plans to start
for China in the near future
The present American group, consist
ing OF about thirty leading banking
houses and banks In the principal cities
Of the United States, the composition OF
which has been approved by the State
Department. was formed early last au-
tumn. but up to the present time 1t has
not been called upon to consider any
definite proposition with relation to
China. The local banking houses and
banks which participated in the Amer
lean banking syndicate of the Six Power
group, included J. p. Morgan & Co.
Kuhn. Loeb & Co.. the First National
Bank and the National City Bank.
Other Banks in Group.
To this group for the purpose OF re-
newing negotiations with China there
mas been added the Chase National
Bank the Continental and Commercial
Trust and Savings Bank OF Chicago and
banks in other large cities. the complete
list. which includes financial institutions
particularly interested In the develop
ynent Of Far Eastern matters, and which
has met the approval OF the State De-
partment, having been withheld from
publication. One or two banks on the
Pacific coast are included.
At the time the present American
Eroup was formed there was consider
able talk OF China's desiring to Issue
a new loan Of 100000 to establish a
new currency system. but no application
10 that end was made. Early last au-
tumn, when there was talk Of the posi-
biHty OF floating a definite loan for
China the idea was that owing to the
denoralized condition OF the exchanges,
neither Great Britain nor France would
be likely 70 participate actively in such
a loan. their positions being taken over
temporarily by America and japan.
Nothing tangible, however. developed,
Apart from a relatively small loan
to China for waterways and railroad
development by the American 1nterna-
tional Corporation and the loaning OF
about 81. 600. 900 early in 1917 to China
by group Of Chicago bankers. OF which
the Continental and Commercial Trust
and Savings Bank was at the head, the
only actual loan to China has been one
Of $4,000, 900. Of which f1,500.000 or
$4,000 was placed by the American
portion OF the Six Power Group. That
project was known as the Hukuang Rail-
ways loan.
American bankers first became inter-
ested in loans to China in the spring
II 1909 upon the expressed desire Of the
State Department that a financial group
should be organized to take up the
'7,5oo,Ooo participation TO which Ameri-
csn capital was entitled in the 100000
100 Hukuang loan agreement then under
negotiation by British. French and Ger
man banking groups These four
groups were known as the International
Group, and they consummated that loan
In February, 1919 these groups. at the
request OF their Governments and with
he consent OF China, admitted Russian
and Japanese financial groups to the
negotiations for the reorganization loan
thus constituting what came to be known
AZ the Six Power Group.