The sun., 1919-10-28
BANKERS PLANNING
NEW LOAN TO CHINA
New York and Chicago Institu-
tiOns Consider $15,000,000
Commitment.
MAY REACH $25,000,000
Project Understood as Inde-
pendent of COnsortium of
Banking Group.
MAY REACH S25,OOO,OOO

curities Corporation of New York A
| conference was held late yesterday in
the Chase Offices, representatives of both
institutions being present. The fixed
commitment to the Chinese Republic is
$4,000, 900, but it is understood that the
bankers havs an option on $10,000,OOO,
which they will exercise provided that
market conditions permit
The loan was negotiated by John J.
Abbott. vlce-president of the Continental
and Commercial, who returned few
months ago from an investigation of the
| Chinese financial situation in behalf OF
tho consortium of British, French,
| American and Japanese bankers. Since
his return the consOrtium has announced
| no action in tho direction of Chinese
loan. and it is understood that the new
| loan is an independent transaction, to
| be consummateu pending the conclusion
of the protracted discussion that has
been going on for months between bank
| ing groups which compose the consor-
tium. 1t is understood that the Chicago
bank has obtained the consent OF the
State Department and of the consortium
TO float the loan which will care for
China's pressing needs.
Chinas first need is to meet next
month the maturity of the S5,000,0Q0 6
l..
22, 1916. for public subscription at 97A.
| This loan was made early in November,
1915, by the Continental and CONNER
| cial. Associated with the Chicago
| bankers for distribution in the East was
| the banking firm of Chandler Co, Inc.
| That lean was direct obligation of the
| Chinese Republic and was secured by
| first charge on the entire revenues de-
rived by the Government from the Chi
nese tobacco and wines public sales tax,
which amounted to slightly less than
| s6,00O,000 year. The loan received the
approval of Robert Lansing, then and
row Secretary of State.
Loan to lie Amply Secured.
The terms of the new loan to the
| Chinese Republic have not been an
nounced, but it was learned yesterday
| that 1t will be secured amply and be
| fully as attractive as the loan three
| years ago, for which subscriptions eX-
ceeded Sl5,0O0.000. The big loan to
| China. about which there has been so
4 much discussion, still hangs fire, but
| bankers said yesterday that the project
| vas still in the air. awaiting conclusion
/ OF correspondence over terms, &c, be-
| tween British. French and United States
| bankers. who are in general agreement,
1
| stood, would like to see certain changes
| before attaching their signatures to an
| agreement.
| The present loan of S15,000,00 to
| S25, 1000, 900 has no connection with the
| consortium, but 1t might be taken up
| by the consortium when it reaches a
| complete agreement Last summer II
| was learned that arrangements for a
loan OF s1O0,O0O,00O to China, partici-
pated in by the United States, England,
| France and Japan, with a reservation
| for Belgium when that country shall be
| able to take part in the transaction,
were making progress. 1t was planned
| then to lend 100000 900 in four in
stalments of s25.OOO,OO every one
separate t~nnsaction. In that loan there
were J. /. Morgan & Co, Kuhn, Loeb
| g. Co, the National City Bank. the First
National Bank, the National Bank of
Commerce and the Guaranty Trust Com
pany for New York institutions. three
| banks in st. Louis three in Chicago, two
| in Pittsburg, two in Boston. two in Phil
adelphia, one in New Orleans and one
| in Minneapolis were expected to partici-
pate.
Despite announcement by Frank L.
| Polk, acting Secretary of State, on July
| 29 to the effect that the State Depart
ment would approve the policy Of max
| ing loans to China with an agreement of
| five salient features. no word has come
| from the consortium except a statement
| that progress was being made. The
deslrability of making loans to China
was commented on favorably by John
]. Abbott after his return from China,
J but the report that he made to the bank
| ers was considered by them a private
matter and has never been published,
| The news OF the present loan to the
| Chinese Republic, however, revives in
terest in the subject of a four or FIVE
Power loan to China, and it was said
yesterday that more would be heard of
| the big project soon.
other Loans Made to China.
Loans to China have been an interest
| Ing topic ever since formation of the
six Power group in 1919 to lend funds
| to China. Its members were the United
States, Great Britain, France. Germany,
| japan and Russia. Following establish
ment of the agreement, sums of money
| were advanced by certain members of
the group to allow the Chinese Govern
| ment more firmly to establish itself
The actual loans to China by the six
| Power group have been small and war
developments caused Germany to be
dropped from the consortium. So the
Chinese loans have been limited to the
$4,000, 900 one which Is about to mature
and to one for an engineering project
| made by the American International
Corporation.
Shortly after the Wilson Administra-
ton took the reins in Washington
American bankers were informed that
our Government would not allow their
participation in the loan and the Ameri-
can group Withdrew from all negotia-
tions. The six Power agreement ex-
pired by Limitation on June 80, 1917
and since then American banks have
been free to act independently in con-
nection with a Chinese loan, but the
war came and the only loan was the in
adequate amount of S5.000,00 con
summated In November, 1915. now Il
be supplemented by loan. which may
run as high as s25, ,000. 600. Although
the Administration at its inception tool
so pronounced a stand against loans to
China. an indication OF reversal o.
policy came in November 1916, whef
the IS, 100000 was approv-1 and an an.
nouncement of a complete reversal Of
policy was made in July, when the fol-
lowing features were assented TO by tho
bankers and the State Department II
connection with loans to China,
Formation of a group OF American
bankers to make loan or loans 9nd Il
consist of representatives from different
parts OF the country.
| Assurance on the part OF the banker,
that they would cooperate with the Gov
ernment and follow policies outlined by
the Secretary of State
Submission of names of banks which
would compose the group for approva
by the State Department.