CHINA'S FINANCES.

Dominion, Volume 6, Issue 1639, 4 January 1913, Page 5

CHINA'S FINANCES.

THE SIX-POWER LOAN. > CURRENCY OF PORTY YEARS COMPENSATION FOE FORBIGNEES. By Teleunipli-Presa Association-Copyright ■■_.■■' Poking, January 2. ' Tho preliminary agreement for ,tho six- ; Power loan has been concluded. Tho loan has a currency of forty; years. China receives 0 per cent, below 'the salo price of bonds. , The Chinese.Audit 'Department will supervise the expenditure undor the advisorship of Herr Eomp, a German, who enters the Government service. • A mi^ed.commission will shortly be oppointed ,to assess the compensation for foreigners' losses during tho revolution, which wall b© met by a supplementary loan. ..,;,.i ■'■;..'.. The gTcat dipiomatio and fina'Dcial controversy as to whether the Chinese Government should bo allowed to borrow treey in- London and other European markets,; and, if not; upon what conditions and by tho assistan'oa of wlat banks, has received .further illumination from the publication of a Blue Book entitled /l"™ I * l Correspondence Respecting the , t■°il s °A, . Chlna '" an d from summaries ot the Chinese -,Customs report (states the TSconomist"). ~ , ■■■','.■ ', _ Tho whole subject "falls naturally into tho question of,political ond tho question of financial control. The former wo Qiold very should be strictly avoided, it only because there is no more certain means o£ exasperating the Chinese against ■ their European creditors, and thereby endangering tho whqlo of tho debts' due iroin China to British, French, and German investors; but, in any case, we'beJievo that nothing could bs more foolish than to let.tho Eussians and Japanese gam\ political and military! control of portiqns of. China by tho subterfuge of lending money really raised in London, "the ioan. : policy to China should end in a Mongolian;army being trained by Eussian .officers and a Chinese army by Japaneso_ officers from monev contributed'bt British investors, the British Government; which facilitates :suohr.-a policy will incur a grave responsibility foil future disasters. The Chinese Government has t grcat financial difficulties to face;-V-.A well-informed correspondent writes to'the ■ Economist" with reference to the Crisp loaar from Pcking!-'*Ws do not believe over here that the' second: half of- the issue is yet underwritten, and Mr.' Crisp #1 has very .strong forces agjunst himj (1) He has the Powers against him;' Their protest, against any alienation of tb? Salt Gabelle until all indemnity charges are met means that .£3,750,000 : iyill bo diie'by tho.'endyof Decenlber unless paid off * In tho meantime; : (2) .Neither tho -.BriMsli. nor the French Governments;: aro'; going to give, their benediction .to 'anything floated by the Crisp, group,'and official antagonism isjbound to, have an adverse effect. ' (3) It is clear that 'Mr.. Crisp's i! 8,900,000 delivered at an exohange very inuch ■ against China, Mill not meet, nil China's needs'up to tho undefined and very vague dato'ut,which there/is a fair prospect, of her standing oh her ;owri financial legs.' The most optimistic hardly expect ,that that condition;can;be' realised before the middle of next year, if even then., Tooarry on the administration 'and pay off 1' provisional loans;and; advances, it would appear: as ; if a nominal. iCSO.OOO,-' 000 will bo' wanted.' Perhaps X 20,000,000 in cash may suffice, for it seems probable' that a.Nhcmo. by which,'some of: the short loans can be refunded' is devisable. 1 do' nqt'believe thi\t .the. Crisp ■:group will bo able to secure the doing of it all. Tho Chinese will not give him a monopoly more than anyone else, and they certainly will be very' tempted to nibble at the baits which other firiancml fisher.men,,will danglo./before;,them in ,gaudy colours." Qh tho other' hand,: the original contract between' the Crisp group and the Chinese Government docs seem, to' have given the group''a prcforencd' if- not quite tho sa'me.monopoly :as ,tliat which their intervention put an end to. . :■■'; .'■. "I have little doubt,":adds the ;"Econoi mist's", Peking informant;,"that"tho moment will soon come when'; the; ; iilyesting public will ask bow much money ..will China ask' for, how much, can wo safely give, and how much longer timo will sho want as being necessary to secure the es- : tablishmcnt of a stablo ■. Government? That it is to the interests of the foreign Powers to see an established and stable Government in China asj'quickly ns possiblogoes without saying;ii Thatmcncy is required for this piirposolis certain, and thatsbnio of' it: must-belspent in,ways which, from.an aetonntanfs point' of new, wo may euphemistically describe as Oriental, may, even bo admitted.; Some diplomatists would probably confirm this as personal ex-Chancory; opinion.' ■■'■■;. ,' "But there must 1 certainly bo a limit to the'amount of funds, that foreigners?can put up for such a ( purpose, and to be; doalt with in such a manner. .Tho great question before long will: bo, where- is that 1 limit, and when will it. be reached P If any of the big Powers stand out firmly on tho question of, control, the dread of breaking np the financial consortium: will proliably 'keep in it soma. who' would ratlher be outside. ,If this condition is maintained, there will bo a deadlock. China not only for her own,'but for tho world's interest, must havo money. Otherwise j a stablo central ..Government (which must; bo established by Chinese methods, ns no other method is feasible) will absolutely be impossible. Wo must cither give-■ money or risk tho consequences of delay in tihe establishment of the Government, or wo must contemplate 'tho possibility of ohaos in China. <'. ,-"v