The New York herald. [volume] (New York, N.Y.) 1920-1924, 1921-11-02
CHINA IN DEFAULT,
is MILLION LOAN OFF
Pekin Has Not Money to Pay
Chicago Clain-State-
ment by Lamont.

The resignation OF the Minister o,
Finance OF the Chinese Government two
days ago resulted yesterday in the de-
fault of payment OF $5,500,000 Chinese
Government y per cent. notes and in
the annulment of negotiations for new
loan of s16,000.00O. The notes which
fell due yesterday were sold through the
Continental & Commercial National
Bank of Chicago. The Chicago bank re-
ceived cabled word from China, accord
ing to dispatches from Chicago. tina,
there was not sufficient funds in the
treasury to meet the maturity. The
money was to come from the new loan
Thomas w. Lamont. In behalf of the
managing committee of the American
group in the Chinese loan consortium Is
sued the following statement:
THE American group recently re.
Gently received word that it would be
agreeable TO the Pekin Government Ia
receive proposals for a loan aggregat-
ing say s16,000,0o0, the proceeds to be
utilized to meet two maturities OF the
Government, each for $500. 600, and
falling due respectively on November !
and December /; also to take up pas,
y
bonds, the technical default In this Is.
sue having been due to the etate of wa,
at one time existing between China and
Germany: and further to provide funds
for the reorganization of the Wine and
Tobacco Tax Bureau, the revenues from
which might be made available as sc.
curity for the loan under consideration
I'm response to the request made from
Pekin, and in order to put the Gov
eminent in funds to avoid any possible
default, the American group submitted
proposals for loan for the amount
named and for the purposes stated. The
Government having failed. however. to
accept these proposals the matter has
been dropped"
CHICAGO, Nov. 1.-The Chinese Cow
ernment's s5.5o0.o00 loan, made by the
Continental and Commercial Trust and
Savings Company and due to-day, was
announced in default by officials of that
company this morning. According to a
statement from the company, an appeal
has been sent to Washington, as the re-
suit OF which a strong message is I'M
derstood TO have been sent the Chinese
Government
The statement added that the company
believes 1t to be only a question of
Sii''c Until NiiiId Nculu NC ip1e 10 pay
the loan. The statement, given out by
Arthur Reynolds, president of the COM
pany. said also:
John Jay Abbott, one of our vice
presidents, is in China carrying on ne
gotiations with the Republic of China
for the payment Of its S5.50O,000 notes
that mature this November I. The ne
gotiations proceeded favorably and ar
engagements were about to be concluded
by which the republic would have been
placed in funds with which to pay these
notes, but at the last moment the Chi
nese Minister of Finance resigned and
we have just received cable advice that
the Chinese Government will not have
funds with which to pay the notes."
WASHINGTON. Nov. 1.-The loan made
by the Continental and Commercial Trust
and Savings Company to the Chinese
Government was concluded while nego.
tiations were under way for the con.
sortium agreement and was intended
to defray the administrative expense
OF the Chinese Government as tempo
rary measure of relief
The Chicago corporation consulted
State Department officials when the loar
was concluded, but II any measures will
be taken on this account to bring the
default to the attention Of the Chinese
Government. 1t was not indicated to-
day. no official statement on the sub
Ject being made.