Straight, the representative of the 575
American Group, it was not a matter for surprise that no final decision should be reached; but he has now been back in the Chinese capital for some dave, and it may be presumed that the information regarding the negotiations represents the wishes of both sides in the matter.
The loan of ten millions sterling is earmarked to the extent of two-snd-a-half million pounds for Manchurian purposes, including the establishment of a Manchurian bank, while the remainder is supposed to be reserved for " currency reform" under tae aegis of H. B. Sheng Kung-pao. In debating the terms of the loan, the American representative is understood to have stipulated, on the advice or instractions of the Washington Government, that the final contract shall include provision for regular and effective supervision of the expenditure of the loan fonds for the purposes to be specified in the agreement. Tt requires litle knowledge of Chinese methods and aspirations in matters financial to engender the belief that any such terms will be stubbornly resisted by the Chinese Ministry of Finance, which will feel that on this point it has the full support of public opinion behind it. For this reason the negotiations may well prove protracted, and it is by no means certain that the loan will actually materialize, if the United States Government refuses to recede from its demand form safegu"rd, which is undoubtedly necessary in the interests of the bondholders. And on this point it is to be hoped that the agreement between the four financial groups will tend to strengthen the Americxn Government in its attitude. OF recent years there has been gradual reduction of safeguards in the degree of foreign supervision that the Chinese loan agreements have carried with them, as a result of the international n for the post of creditor to China. The reputation that the country enjoys in regard to the fulfilment of its financial obligations and the knowledge that, where pressure has once been brought, it can be brought again have led to the introduction of a policy of non-control in the matter of loans. such a policy flatters Chinese it is far from certain that it is wholly in China's interests or in the interests of the creditors. Few countries lightly repudiate their obligations; but it is possible that atime may come when not only the situation renders such a course inevitable, but _—_ circumstances enable the repudiation to be effected with a minimum of moral turpi-
Text read from the printed page and cleaned; old type leaves the occasional error.