The question of China's finances during the year was wrapped up in the proposed new Consortium and the position of Mongolia and Manchuria. On May 20 the principal Powers reached a preliminary agreement regarding the Consortium the chief points of which were (1) that they should pool all existing and future options, except those already executed or in course of execution; (2) each national bank group would widely represent all banks of that particular country which were interested in Chinese finance and (3) all constructive work should be carried out on an open and competitive basis. The proposition was, of course, subjected to the usual misrepresentation in certain Chinese quarters and it became necessary for the American Minister to make a statement on June 27 to the effect that the Consortium existed purely for financial reasons and did not constitute a monopoly for contracting and furnishing material. It merely unified foreign interests in China. In August it was reported that the Japanese Government would make a reservation to the agreement excluding Mongolia and Manchuria from the purview of the Consortium and on September 8 it was reported that Japan refused to enter the Consortium as Great Britain, America, and France had officially stated that they could not agree to the exclusion of Mongolia and Manchuria. The matter acco ingly hung fire though negotiations are proceeding which may eventually show a way out of the difficulty.
In the meantime matters had been moving with some rapidity in Mongolia. Prior to the students' demonstration in May General Hsu Shu-cheng was actively engaged in preparing for expedition into Mongolia which actually went forward to Urga where it caused considerable dismay, but towards the latter end of October it was announced that Mongolia was preparing to renounce its antonomy. This indeed proved to be the case and shortly afterwards the Urga Government appealed to the Central Government asking that the Mongolian independence should be cancelled, whic was in fact done by a Mandate leaving only China to see to the abrogation of the Kiachta Treaty and to provide funds for replenishing the depleted treasury. On November 25 the Russian Minister formally protested against the can-collation in' view of the Sino-Russian-Mongolian Treaties of 1912, 1918 and 1915, and there the matter rests at present.
Text read from the printed page and cleaned; old type leaves the occasional error.