Indiana daily times. [volume] (Indianapolis [Ind.]) 1914-1922, 1921-11-24
CHINAIN NEED
OF SUPERVISION,
POWERS HOLD
Republics Salvation Rests in
Big International Loan
Backed by COnsOrtium.
Special to Indiana Daily Times
and Philadelphia Public Ledger.
BY FREDERICK ny. WI

1t will not be Observation-Disclosures Of
China" in the sense that term would
ordinarily infer. But, according to
specific statements made with the
authority of the British delegation, far
reaching schemes Of international CO.
operation are being considered. 1t was
categorically stated that such an
arrangement is implied" by the Root
resolutions which on Monday laid down
four general principles for the political
and economic regeneration OF China. Ac-
cOrding TO the British spokesman, whose
announcement struck those before whom
it was delivered as of the most momen-
tous character, the arrangement" up
on which the committee on Pacific and
Ear Eastern questions is celebrating
concerns the two most important
economic factors in China-finance and
communications.
It was declared that the 'arrangeln ant"
provides primarily for two things:
1. Recognition by China of the finance
cOnsortium of October. 1920. whereby
banking groups Of America, Great Brit
ain, France, Japan and Belgium virtu-
ally assumed control Of all external loans
to China.
.. Pooling for common operating adj
vantages of all Chinese railways.
To all who understand China's prob
| lens, il will be seen that such an ar
rangement" inevitably would carry with
1t something closely akin to the intel
naturalization of the cOuntry's basic eco
monte factors. American authorities on
China long have looked upon an extern
sion of the consortium principle as the
only solution of the Chinese puzzle.
As long ago as the first week of Au
gust, 1921. when President Harding's con
ference project was in its infancy, Wash
ingtOn dispatches from your correspond
ent outlined in detail a scheme approved
in important American quarters and
which aimed at international cOopera-
ton in the salvage Of China's chaotic
economic affairs. The project then de-
scribed-and the arrangement" now
said to be under considerations in no
sense an attempt to infringe the SOW
ereignty Of China. Its object, on the con
trary, is to set up an economic regime
in the country that will make it impOssi-
BILE for foreign powers in future. as they
have In the past, TO play ducks and brakes
with the political and territorial integ-
rity OF China.
The object of international coopera-
ton" in China-which as officially pro
claimed in the British House Of Com
mons last week, now is to "supersede
the policy OF spheres of interest"-is to
open door That door, as nearly all OF
the foreign powers know, has been wide
open in more sense than one. It has
been open TO the intriguers, bribers and
political gamblers of every nation that
had an axe to grind at Picking. 1t has
been wide open to the concession hunt
ers. 1t has been wide open to the
trickster- diplomat. The purpose of in
ternational cooperation" is to see that
me black legs Of the nations, clothed
in many guises, do not enter China
through the open door and being in,
proceed to corrupt and demoralize the
\ government or governments they find
within the portal for selfish purposes Of
their own. In 4 way the proposed in
ternatiOnal cooperation is TO save China
from itself, by closing the open door
against the notorious practices of the
past. which have systematically and
ruthlessly victimized the Chinese gov
eminent and people.
CHINA RESENTS
CONTROL.
China declined to recognize the finance
cOnsOrtium which came into existence
largely under American leadership a
year ago. 1t was declared to be an IN
justiiable infringement upon China's
as she pleased. The consOrtium, though
? grouping of private banking interests
Of the five countries comprising II, is
clothed with specific and important po-
liticaI authority. In certain emergencies
the diplomatic representatives OF Amer
lea. Great Britain, France, Japan and
Belgium at Pekin would clear for ac-
ton on the cOnsOrtiums behalf. One Of
the early paragraphs OF the cOnsOrtium
agreement reads:
Whereas, respective governments have
undertaken that In the event Of competi-
ton in the obtaining of any specific loan
contract in China, the collective sup
port Of the diplomatic representatives Of
the governments viii lie secured to the
parties hereto for the purpose Of OBJ
tanning such contract"
That paragraph means that if the Amer
lean British French japanese Belgian
cOnsortium finds itself competing with
nonconsortium group for a Chinese loan,
the diplomatic body in question would
back up the ConsOrtium project.
Bearing graphically upon the benefits
OF the consortium system for China it
self, another paragraph in the agreement
saws:
Whereas. the said national groups are
of the opinion that the interests of the
Chinese people can IN existing circum
stances best be served by the cooperative
action Of the various banking groups
representing the investment interests OF
their respective countries in procuring
for the Chinese government the capital
necessary for a program Of economic re-
construction and improved communica-
tiOns; and
Whereas, with these objects in view
the respective national groups are pre-
pared to participate on equal terms in
such undertakings as may be calcula ted
TO assist China in the establishment Of
her great public utilities and to these
ends TO welcome the cooperation of Chin
csc capital"
The American group in the consortium
is the largest, including some forty diff
ferent banking institutions, as compared
to thirty, twenty, ten and smaller num-
bers for other powers. The arrange
ment is that Belgfum's participation in
any loan contract should he one-half
Of that Of the other four powers. whose
shares would be equal The effect Of the
c8nsoFtium is to make 1t impossible for
China TO float an external loan outside
of the cOnsOrtium. None has been at
tempted since the arrangement become
effective. The cOnsortium agreement runs
for FIVE years, until Oct. 10, 1925.
There was a special portion of the con-
sOrtium agreement that excepted the
japanese railway concessions in South
MRnchuria (the South Manchurian Rail-
way from the operations Of the pact.
No one in Washington thinks, apparent
". of forcing international cooperation
upon China. Efforts on that score are
certain TO be confined to persuading the
Chinese delegation that China's best in