Evening star., 1921-07-10
FRENCH PRESTIGE
|NCH|NA seen LOST.
Big Bank Failure Involving
Many Millions Agitates
Political Circles.
BY PAUL SCOTT MowRER.

BY Wireless to The Star and Chicago Daily
News Copyright. 1921.
PARIS. Franco. July 9.-The China
Industrial Bank failure. which now
seems to involve a sum Of between
500 100000 anu 100000. 900 francs
(normally $loo.ooo.0oo and s16o. o.ooo.-
ooo). continues to agitate poli,i-
cal and financial circles Most
French leaders particularly regret
this failure because Of the loss Of
prestige in the far east Ii involves
FOR France. Several deputies are
insistent in thoir desire to inter-
pellate the government on the
subject.
Meanwhile a private investigation
undertaken for the Daily News by
the noted economist. Francis Delaisi,
reveals something Of the curious in
side history of this defunct bank,
which Is a vivid illustration of the
close relations existing in most mod
and the leading financial interests.
According to NJ. Delaisi. 1t was Baron
Empain. the Belgian King Leopold's 8
associate In Kongo affairs. who orig
inally formed the China Industrial
Bank. placing at its head Andre and
famous French chemist and states
man. Marcellin Berthelot. Andre was
already head OF the Parisian Sub
way Company. while Daniel directed a
big mandatory of electrical supplies
and an electrical power plant. A third
son. Philippe Berthelot. is general
secretary OF foreign affairs and as
such Is popularity considered to be the
real instigator Of Frances foreign
policy.
Hostile to Consortium.
Organization of the Industrial Bank
found Chinese opinion distinctly hos
tile to the great corsortium of Brit
German banks formed to monopolize
and divide>betwcen them all the loans
and orders in China
In these circumstances" says De-
laisi. "the bank of the Berthelot broth
ers entered into direct relations with
fully persuaded the latter to sub
| scribe to large number Of orders
and to put the Chinese vice president,
delegated by the Peking government,
on the board Of directors. The Chi
! nese thenceforth considered this
banker and best arm against the dom
! ination Of the great consortium. ac-
| cording to its numerous concessi ons
Chinese big business" followed the
governments example. Numerous
| agencies were established through
out the Celestial empire and the
banks vogue became so great that
| last December its total deposits
reached 1900. 100000 francs (normal-
ly $26o. 900, ,o00).
Situation Became Desperate.
I'm the slump following the world
wide frenzy of speculation, the situa-
tion of the bank seemed desperate.
t'hiliippie Berthelot requested Georges
Leygues. then premfer of France, to
persuade Britain to come to the as
sistance of his brothers bank. He
also. through NJ. Leygues, besought
the support Of the Bank OF France.
At the same time the French consul
| in Hongkong, on the order of the
ministry Of foreign affairs. publishes ed
a letter .reassuring Chinese opinion
concerning the bank, thus in q meas
ure engaging the responsibility OF
the entire French nation
However. In the end all efforts
proved unavailing. The Industrial
Sank Of China has closed it's doors
From the American point of view
this financial drama is Of particular
| interest. as it affects the plan of a
new Chinese consortium on which
| the american State Department
| places such great hopes. 1t is now
clear that some of the leading French
! hnanciers are convinced tnat this
great scheme is doomed to failure
| What with the rivalry of the DOW
| ers and the hostility Of the Chinese
1t cannot possibly succeed The
proper method is that of the Chinese
i Industrial bank-that is to say, CO.
operate with the Chinese themselves u