CHINESE LOANS.

Dominion, Volume 5, Issue 1467, 15 June 1912, Page 5

CHINESE LOANS.

MONEY NEEDED AT ONCE.

By Teloiraph-Prc3s Association-Copyright. Peking, Juno 13. _ Tho Prime Minister (Tang-Shao-Yi) line informed tho foreign bankers that unless tho Chinese Government receives tho sum of 19,000,000 taels (approximately £5,750,000) during June he will consider himself free to borrow elsewhere. Tho Assembly has rejected a proposal for tho issuo of irredeemable notes, and approved of tho issue of .£20,000,000 worth of national bonds at 95, redeemable in ten years.

CONQUEST'BY FINANCE. . WHAT IS GOING ON IN CHINA. . Is it realised in England, asks "Asiaticus in the London "Daily Mail," that a movement is on foot, started by great financial syndicates, backed by our own i'oreign Office, among others, which, if it is not checked, must assuredly bring about tho break up of China? Uiien the Chinese Revolution began, and the country lapsed into anarchy, laxcollecting fell into partial abeyance. The need for financial aid from outsido soon became apparent. ■ Small loans were talked of at first, and a little money was advanced. Then came a project for a loan of .£42,000,000, afterwards increased to .£00,000,000. Within tho last few days tho loan proposals havo swelled to ■£200,000,000; but I believe the scheme which will be submitted to tho public will be .£60,000,000 at once ami another .£200,000,000 after a, very brief interval. . The brains that aro formulating these loan proposals are in Berlin and New York, but tho bulk of tho money will be obtained in England and France. The six Powers behind tho syndicates aro Great Britain, Franco, Germany, the United States, Russia, and Japan. How can Russia and Japan lend money? Very simply. They borrow at a comparatively lo.v rato in England and France, and lend to China at a higher rate. On the operations as a whole tho bankers got (ho profits, and the six Governments get tho responsibility. For be it understood that these are not really private loans, except when it comes to sharing flotation and other profits. The Powers, in effect, undertake to see that inteiest and sinking fund are paid. If China comes fb grief they will have to intervene.

If China was a, stable State with' a sound Government the proposed vast loan might not bo considered excessive

She has huge untapped resources. . Undoubtedly a wise expenditure of great sums might develop her prosperity and enable her to face far moro than her present liabilities. But the fact is that flt tho end of 1911 she owed with another .£10,000,000 to come, and her dependable securities were pledged up to the hilt. Much of the money advanced has been wasted, but a substantial proportion of it represents tho Boxer indemnity.

When China sinks under her load of indebtedness, or when the last'vestiges of orderly government disappear, there will be a cry for intervention, and intervention will mean administration. It will bo tho case of Egypt over again. Europe poured money into tho hands of IsmaiT while he was misgoverning a naturally rich country. When the liabilities b'ecame overwhelming someone else had to step in and govern, and Ismail vanished, as the Chinese Ministry will vanish. •

That is what the most far-seeing minds at the back of this movement are aiming at. They do not want to help China, but to smash her up; ami the surest way to smash up China is to lend her vast sums which she cannot repay. Wo see nt work in tho Far East the very newest form of. conquest, that of conquest by finance. There will be a general scramble for territory. There will probably also be over tho spoils. A Dual Control failed in Egypt. How can six Powers control the internal administration of China?

Six European Powers cannot even agree alymt the affairs of Crete.

There is only one rational course for tho Western World to pursue reinrding China (concludes the "Daily Mail's"- contributor), and that is to lend her only the money she requires to pay her troops, and for other urgent necessities, until sho lins found some way of political salvation, established n stable Government, and got her tax-collecting machinery at work again.