New-York tribune., 1920-10-18
Trade and Finance
Developments of the Week and
Their Bearing on
the Outlook

financial district last week belonged
not to the moment but to history.
Overhanging all speculative develop
ments was the consciousness that the
largest foreign loan that ever matured
in this country was to fall due on Fri
day. The gigantic shifting Of funds
involved came on the same day that
1.-THE United States Treasury had to
pay off maturing certificates of indebt-
edness, disburse interest on the fourth
~ per cent Liberty bonds and also
make heavy Withdrawals from the local
banks. With such operations impend-
ing bankers were inclined all through
the week rigidly to limit their offerings
cf money on call for stock market pur-
1oses, and spectators, sensitive to the
situation, were indisposed to carry out
operations on an extensive scale. As
result the volume of transactions our
ing the trading week, which wa. inter
irpted by the Columbus Day holiday,
was unusually small.
Just as the paying off in full Of the
Anglo-French loan Of $5o0,o00,o0O
marked an essential chapter in the
tory Of Allied war financing. SO the
formal coming into being of the Chi
nese consortium stamped what may
turn out to be turning point in the
relations of the massive republic Of
the East with other nations. What
was more impressive to the layman
than the discussions of financial tech
nique was tho emphasis laid by the
representative bankers of four great
nations on their declaration that their
aim was primarily TO aid China,
not to grab privileges for themselves.
So intent were they on burning their
assertion of principle into the public
mind that they inserted a special clause
in the partnership agreement pledging
themselves fully to cooperate with
Chinese banking interests and to act
in broad -visioned way for the good
of the great inert masses Of China.
The consortium. to which q Belgian
banking group was admitted, has thus
far arranged no loan, but it created
machinery for considering loans to the
republic. The next move is up to the
Peking government, which, it was
stated, has not yet formally applied for
any specific financial assistance. The
consortium will first function. it is
believed, through extending funds for
the completion Of the Hukang Rail-
ways.
Every indication points to tho fact
that the ground has been cleared for
action and that at least the preliminary
formalities, which have engrossed at
tcntion since the new consortium was
accepted by the governments inter
ested in May, 1919, are completed. The
practical effect of opening China up to
world trade will be limited only by the
thoroughness with which the interna-
tional banking groups adhere to their
expressions of high purposes and by
China's ability to attain workable
oegree of stability in its homo affairs.
Those Americans who contend that
this countrys foreign trade oppor-
tunities lie not in Europe but IN the
other continents may find in the new
instrument means of converting their
theory into a condition. The consor-
tium idea is based on q union OF pur-
pose between governments and bankers
and is practical expression of the
belief that China's needs require the
ioint effort of the leading powers
rather than a competitive scramble for
the most covetous concessions.
As stock market influence the
shifting Of funds in the money mar
ket on Friday was dominant. Although
cautious preparations for the huge
bookkeeping operations had the ERECT
of ,octinp as straitjacket on the