New-York tribune., 1921-11-08
Washington Denies
Threat to Pekine
I'm Debt Episode
Situation in China known
To Be Unsettled; Hint of
New Alignment of Rival
Factions Is Circulated

From Tae Tribu~c's Wcshsngton sureo,.
WASHINGTON, Nov. Tt was said
here officially to-day that there was no
truth in the report that this govern
had either directly or indirectly
threatened to withdraw recognition of
the Peking government unless the loan
Of s5,500,oO0, due November I. was
promptly paid.
Although the text of the American
note to China was not made public,
it is understood that it pointed out
that unless China took every possible
step to make good this default it could
not help but have an adverse effect
upon China's financial standing and
credit in this country. The news that
the Chinese government had defaulted
came as complete surprise TO the
Department of State on October 81, as
all previous information had led to the
belief that the loan was actually in
process of being refunded
Although there is no direct connec-
ton between the resignation Of the
default, it is understood from reliable
sources that the political situation in
China has been distinctly disturbed by
this question. 1t has been known for
some time that the financial condition
OF the Peking government has left
much to be desired, and it has even
been rumored that there have been
dfficulties IN providing the present
delegation with sufficient funds to
meet the necessarily high expenses in
yolved in sending large mission to
America. 1t is well known that certain
elements in the South China group have
endeavored to prevent the North
China government from obtaining fur
ther loans on the ground that only bv
Insolvency would it be possible to
BRING about the collapse of the Peking
group.
It is only fair to say, however. that
despite these grave difficulties in
China, and the complete lack OF har-
nony between the different elements.
Or. Sze, the Chinese Minister, and DR..
Wellington Koo, and certain of the ad-
vlsers of the Chinese delegation to
the conference, represent in point of
tact the Chinese people, and not mere
ly one government. In the best in
formed circles it is stated that there
is closer understanding between the
heads OF the Chinese delegation and
the different elements in China than
would appear from the frequent pro-
nouncements of the Canton govern
ment that it will not consider itself in
any way bound by the acts of the Pc
king governments representatives at
the conference
That conditions in China are at pres
ent much unsettled is further evi-
denced by the report from Pekng that
there is the possibility of a new align
ment of politicians in China which
would unite certain elements in the
North and South, and possibly form a
new government. It has been reported
that DE-. Sun Yat-sen. head OF the
Southern government, has reached an
understanding with General Chang
Tso-lin, military Governor of Man
churia, one of the most powerful men
IN China, and that General Hsu, better
known as Little Hsu, who is generally
considered man of great personal
force, will join with them. Such a COM
bination might we'll prove to be a
powerful one, although what effect it
would have upon the present Peking
government is at present unknown.