the United States, France and Germany-not because they were willing to pool their interests, but rather because the German capitalists had underbid the British and obtained the Hukuang railway concession, and there was no other solution of the tangled situation than the common sharing of the concession, which was effected by the Berlin Conference of Bankers; and the United States was not granted participation until President Taft threw his whole personal weight of influence into the diplomatic controversy by cabling a personal despatch to the Prince Regent of China. Thus this notable instance of international combination and coöperation was an outcome to which the Powers were driven, relunctantly but inevitably, by the force of circumstances.

A real instance, however, of international combination and coöperation, commencing at the close of the preceding period and extending nevertheless into this period, was the currency reform and Manchuria industrial development loan. The loan was initiated by the Chinese Government and first offered to the American Banking Group. The preliminary agreement for a loan of $50, 000,000 was signed by this Group on October 27, 1910. But the United States Government deemed that such a gigantic undertaking as the currency reform and the Manchurian industrial development would need the sympathetic coöperation of the Powers and should be shared by all of them alike. So out of good will it extended an invitation to the other Powers to join in the loan. As a consequence, France, Germany, Great Britain and the United States, through their respective financial agencies, signed the agreement on April 15, 19 for a loan of £10,000,000. On account of the Revolution of 1911, however, the loan was not floated, although an advance of sterling treasury bills amounting to the value of Shanghai taels 3,100,000 was delivered for the urgent needs of the Chinese Government on March 9, 1912.3

Thus at the opening of the present period, through the

experiences derived from the Hukuang Railway loan and the currency reform and Manchurian industrial development loan, the powers had already learned the lesson of the advantages of international combination and coöperation and were therefore quite ready to try this new policy. And the instrument through which the policy was to be put into effect was the quadruple syndicate or the old consortium, consisting of the banking groups of Great Britain, France, the United States and Germany, which was a direct product of the Hukuang and the currency loans. To this quadruple consortium were later added Russia and Japan. The working agreement of the sextuple group was signed on June 18, 1912, at the Interbank Conference of Paris, setting forth the principle of equal participation on the basis of complete equality.

The first subject the consortium was to deal with was the reorganization loan of £25,000,000. Shortly after his assumption of office, Yuan Shih-Kai, then Provisional President of China, commenced the negotiation for the loan. On making a request for a preliminary advance of 10,000,000 taels for administrative purposes, he had promised the original quadruple group that he would give first option to the group for the reorganization loan, provided their terms were as advantageous as those of the other banking groups. But when the negotiations started, it was soon found that the terms were too onerous. Pressed by immediate needs, a small Belgian loan of £1,000,000 was concluded on March 14, 1912, for which service preference for future loans was pledged. The conclusion of this loan called forth a stormy protest from the quadruple group. As a consequence, the loan was canceled. Thereupon the negotiation for the reorganization loan was resumed, and meanwhile, as we have seen, Japan and Russia were admitted to the consortium.

During the negotiation, it was soon discovered that the Powers concerned aimed to secure the supervision of China's finance. To this China vigorously declined to accede. Later, as a result of the conference of the banking groups at London, May 17-24, the Powers demanded the right to manage the loan funds for five years, the foreign supervision of salt gabelle, the right to appoint a foreign representative to be president of the auditing bureau and to appoint a financial adviser to the Chinese Government. To these proposals the Chinese Government again refused to give its assent. A deadlock thus ensued.

7

8

Pressed once more by urgent needs, China again turned to other sources for temporary relief. This time she concluded, on August 30, 1912, with an independent British Syndicate (C. Birch Crisp & Co.) for a loan of £10,000,000, for which preference was again given for future loans, provided the terms were equally advantageous as those otherwise obtainable. The conclusion of this loan, commonly called the Crisp Loan, once more called forth the protest of the Powers, in consequence of which the privilege of preference was withdrawn and the issue of the second half of the loan was canceled at a compensation of £150,000.9A

Thereafter negotiation were again resumed. By the end of January, 1913, the agreement was ready for signature. At this juncture, France and Russia made objections to the appointment of foreign advisers suggested by China. A shameless wrangle ensued. The controversy was finally settled by the agreement to have a Britisher as Inspector of the Salt Administration, a German as director of the National Loan Department, and two advisers, one French and the other Russian, for the Auditing Bureau.

During the time when the Powers were scrambling over the appointments of advisers, President Wilson, conscious of the precarious nature of the reorganization

loan, withdrew the support of the United States Government from the American banking group, and issued a proclamation on March 18, 1913, announcing that as the terms of the reorganization loan touched the administrative integrity of China, the United States could not become a party thereto.9B Consequently, the American group withdrew from the Sextuple Consortium.

The final agreement was signed on April 26, 1913.10 The amount of the loan was to be £25,000,000 (Art. 1). The security was to be the Chinese Salt Administration (Art. 4), which was to be reorganized under foreign supervision (Art. 5). The rate of interest was to be five percent (Art. 8). The life of the loan was to be forty-seven years (Art. 9). Redemption after a lapse of seventeen years and up to the end of the thirty-second year was to be at a premium of two and one-half percent, but after the thirty-second year extra redemption could be made without premium (Art. 9). In reimbursement of expenses connected with the payment of interest, and with the repayment of the principal of the loan, a commission of one-fourth of one percent was to be paid to the banks. For the flotation of the loan a commission of six percent of the nominal value was to be granted. The issue price was to be not less than ninety percent (Art. 13), securing to China a net price of not less than eighty-four percent. China was to establish an account and audit department (Art. 14).11

After the conclusion of the reorganization loan of 1913, the policy of international combination and coöperation came to a standstill. This was due to two main causes. The first was the withdrawal of the United States which inaugurated this policy during the negotiation of the currency loan and was its real champion. With the absence of the United States there was no moral leader among the Powers who could uphold the doctrine of equal opportunity of trade and the integrity of China. As a result, the other Powers fell into their

old practice of international struggle for concessions. The other reason, which came later, was the Great War in Europe. That drew away the contending Powers from the concession scramble in China to the battlefields of Europe. The policy of international combination and coöperation was therefore suspended until the close of the Great War, when the Powers instituted the New International Banking Consortum and came back to China with the former policy of international combination and coöperation.

As we have seen, the withdrawal of the United States left the other Powers without a moral leader, and without an earnest champion of the policy of international combination and coöperation. As we have also seen, the consequence of the withdrawal was the falling off of the Powers into the old practice of international struggle for concessions. In pursuance of this old policy of competition, which brought on the Boxer Uprising of 1900 and the Chinese Revolution of 1911, the Powers again contended for concessions. On September 24, 1912, the Belgian Company, Compagnie Générale de Chemins de Fer et de Tramways en Chine, secured the concession of the Lung-Tsing-U-Hai Railway. 12 On December 12, 1912, the supplementary clause was signed,13 and on May 1, 1920, another subsequent agreement for the loan was entered at Brussels.14 On July 22, 1913, Belgium and France, through their respective financial agencies, jointly obtained the concession of the Tatung-Chengtu line.15 France procured, besides the five percent industrial gold loan of 1914,16 the contract for the Ching-Yu Railway on January 21, 1914,17 and the pledge of the Chinese Foreign Office regarding preference to French nationals in railway and mining enterprises in Kwangsi Province.18 Germany acquired, by an exchange of notes, on December 31, 1913,19 the right of extending the Shantung Railway from Kaomi to Hanchuang and from Tsinan to Shunteh.20