New-York tribune., 1921-12-05
Lamont Denies
Bankers Plan
TO Rule China
Head of American Group
in International Censor
tium Replies. to Charge
Made at Arms Farley
Ready to Step Out Now
World Organization Formed
at Washington's Request,
He Says, as Safety Move

,n connection with the Conference for
the Limitation of Armament, asserting
that the international consortium OF
bankers on China is seeking a monop-
NV in the financial and economic af-
fairs of that country and impugning
the motives behind the consortium
agreement, have brought lengthy
statement from Thomas w. Lamont, of
]. P. Morgan & Co., as acting chairman
Of the American banking group of the
consortum, replying to the critics of
the international combination.
Il is denied on behalf of the consor-
tium that the international banking
group seeks the financial control of
China Moreover, it is asserted that,
having been organized originally at the
instance Of the several governments,
the consortium, upon notice from such
governments that its services were no
longer required, would be prepared to
arrange for immediate dissolution, thus
avoiding further outlays and continu-
ing heavy sponsibility.
At the outset Mr.. Lamont makes it
clear that the new consortium was in
itiated by the Department Of State at
Washington when. in 1918, it requested
J. P. Morgan g. Co., Kuhn, Loeb & Co.,
the National City Bank, the Chase Ma
tional Bank and the Guaranty Trust
Company of New York, Lee, Higginson
& Co., of Boston, and the Continental
and Commercial Trust and Savings
Bank Of Chicago to lend their good
Offices to the formation of an American
banking group for international coop
Grafton in the assistance of China.
Banking Groups
"The firms and institutions to which
this request was preferred" the state
ment of Mr.. Lamont says, "acceded to
it. and thereupon was organized the
American banking group. to member
ship in which were invited, with the
approval of the Department of State,
thirty-seven of the leading banks and
banking houses throughout the coun-
try. To all those invited to become
members of the group it was made
dear that the enterprise was Of the
character of a public service, entered
upon at the request of the government
to the end of assisting to maintain the
governments traditional policy of the
open door for China; further, of at
tempting to substitute (for the inter
national competition that at one time,
by reason of the struggle for conces-
sions, threatened the integrity OF
China) the principle of international
cooperation in the development of
great public enterprises in China, such
as the construction of railways, canals
and highways, and the reform of
Chinas currency, the defects of which
proper and natural expansion of her
4rodo daroactin wall fOroirp II
was clearly understood that the con-
sortium, if and when formed, should
not concern itself with banking or with
industrial and commercial enterprises,
but only with such larger economic de-
velopments as have just been men
toned, the firm establishment Of which
would render China safer and more
stable field for private and individual
initiative.
Following the successful formation
Of the American group the Department
Of State proposed to the governments
of Great Britain, France and Japan that
they should encourage in their re-
spective countries the formation of
similar groups; all such groups, if and
when formed, to constitute the interna-
tional consortium, to pool for the COM
mon benefit such concessions, if any, as
the individual members might hold in
China, and to work together as free
and full partnership for the larger
ends in question.
Organization of Consortium
1.-THE final organization of the con-
sortium was somewhat delayed in order
to clarity the situation created by the
fact that the Japanese banking group,
at the instance of it's government, pro-
posed certain reservations as to the op-
Grafton of the consortium IN the Chi
nese provinces of Manchuria and Mon
golia. These reservations having been
withdrawn early in 1920, during the
course of visit made to Japan and
China by Thomas w. Lamont, of the
American group, meeting Of all the
International delegates was held in
New York City and on October is, 1920,
the International consortium was finally
organized"
The consortium, the statement de-
clares, laid down the principle when it
was organized that should China decide
to accept assistance it would be pre-
pared to make loans to the government
Of China, federal or provincial, only
Tor constructive purposes. "The con-
sortium sought in this way to lend its
support to those elements in China that
were resisting efforts made to obtain
IN return for valuable national conces-
sions large loans for quasi-military or
Delng expended apparently without per-
manent benefit to the Chinese as a
whole.
Proceeds of Loans
The consortium also adopted the
principle that, in the case of any loans
taat 1t might grant to the government
Of China, some machinery must be es-
saollshed by which assurance could be
mad that the proceeds of the loans were
expended for the purposes for which
they were intended. Experience hav-
ing shown that the proceeds of certain
former loans made to the Chinese gov
ernment for specific purposes of i'm
pfovement had been expended in un-
productive ways, the members of the
sonsortium-though having great faith
y, ~ the fundamental integrity of the
onlnese people--felt that they could not
uner Chinese government securities to
.ne investment communities of their sew
sfai countries unless they could give as
hurance that the loan proceeds would be
eminent"
!, Seyond tho assertion of this princi
Re tne consortium has not gone, the
.l Lf. Lamont statement declares, and
shs shs charge not infrequently made that
su tue consortium seeks the financial con-
S..i aoi OF China is entirely without foun
ssuon On the contrary. it's spokesman
s;ssts s;aserts that it seeks to avoid any pos
H. ;i.pie responsibility beyond that of be-
.ns an properly assured that, in any loan
,!"h y!pyh,a.ion that it may undertake. it is