Poverty Bay Herald PUBLISHED EVERY EVENING GISBORNE, SATURDAY, JUNE 15, 1912.

Poverty Bay Herald, Volume XXXIX, Issue 12790, 15 June 1912, Page 4

Poverty Bay Herald PUBLISHED EVERY EVENING GISBORNE, SATURDAY, JUNE 15, 1912.

; CONQUEST BY FINANCE. Amongst' the causes contributing to make ' money dear at the present time is tho extraordinary position which has arisen m Europe m connection with the financing of the Chinese Republic. Sixty mjllion pounds is to be ' subscribed m Britain alone by October, '.and this .is only part of a movement by financiers, backed by. the Foreign # Offices of the various Powers,' to secure first mortgages bn the Flowery Land. The movement, it is argued by "Asiaticus," who : contributes an informative article to the London/Daily Mjj&il, must^ assuredly brin^ • -'-abojiit the break-up of China. When the* "Chinese* revolution began and the country lapsed into anarchy, taxcollectii!ig, x Vhe explains, fell into partial abeyance. The need for financial aid from outside soon became apparent. Small; loans were talked of at firsthand a little money was ad vahced; i|h>n came a project for a loaaivpf _D42,006,(XK), afterwards increased to" £60,000,000.* Within the last few_ days^the loan proposals liave swelled to i320O,OO0,00O ; but the scheme to be submitted to the public will be £60,000,000 at once, and another £200,000,000 after a very brief interval. The brains that are formulating these loan proposals are 'm Berlin and New York, but the bulk of the money will be. obtained m England and France. The six Powers behind the syndicates are, Great Britain, France, Germany, the United .States, Russia, and Japan. How can Russia and Japan lend money? Very simply. They borrow, at a comparatively low rate m England and France, and lend 'to, China at a higher rate. ...On the operations as a' whole the bankers get. the profits, and the six Governments get the responsibility^ For be it understood that these are not really private loans, except when it> comes to sharing flotation and bUieY profits. The Powers, m effect, undertake to see that interest and sinking fund are paid. If China comes to grief they wilh have to intervene. The international '. financiers are out for business. There are handsome pickings for everybody concerned.. The banks get their 5 per centA- on 'flotation and- th£ handling of the loan transactions afterwards. But. the business of some who are not moneylenders, "Asiaticiis" contends, is to point out whither this extraordinary project, may lead the Powers, and Great - Britain most of all. If China was a stable State with a sound Government, the proposed vast loan might not be, considered excessive. She has huge untapped resources. /Undoubtedly a wise expenditure' of great sums might develop her prosperity and enable her tp face far more, than her present \; liabilities. Bub -the fact is that at the. end of 1911 she owed -£138,000,000, 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 the Boxer indemnity. What is the condition of China to-day? A great part of the Empire is m chaos, owning no allegiance to anybody. Three rival generals, YuaVi-Chang-ssun m Southern Shantung, Huang Hsing at Nanking, and Li Hung at Hankow, seem disposed to fight for their , own hand- President Ywan's most trusted troops were recently m revolt, and sacked portions of Peking. The revolutionary army on the Yang Tse has repeatedly mutinied m sections. Some of the provinces show a strong inclination to repudiate the authority of the central Government. Thei-new Ministry carries little weight, andi is torn asunder by- factious differences. Ston' Vat Sen, who was never able; to keep even Nanking m order j has gone into retirement to preach the cruder forms, of Socialism,^ The, last six months' I liave ' witnessed constant upheavals #nd I frequent massacres. The, -loan negotiaj tions at Peking have bean/ conducted ! inmost within'; sight of bur-iiing villages J 4t,nd.a ravaged, peasantry.! Is it notiiniiadness that 'at suc'hji time the only remedy ■the Powers can press upoivGhina is: tliat sjie. shoiul-A t-r-eble.lier national debt.^t a high rate of interest? Is it fair tor Euro investors : that tlieir- Governments sl^_W«;-p ; .vmiß^e^ri,them? ,she Chinese Administration is a nbllow .shell, which may ( collapse at any mohielit. i\When thfe Japanese V Revolted f Vthey foughll) to establish, the authority' of their Emperor, j nut the whole essence of the Chinese re - I volution is 1 .-', ;■ really repudiation oft'^ny central authority. The outer provinces are already dropping < vaway . Phina should not he taught to - ; . i«place v j her vanished revenue by loans. There is? no guarantee that the money will be -fruitfully .expended-:* ;Mv*«. pp.wpetitio'ilt to thrust money on China, e^n thedpre-. tence of seeking guarantees has^-^een steadily relaxed.- , . Muchv xffh- certain [>recent loans has been deliqer?,t6ly squftiider cd. Some pretence may novfr be maj^at devising guarantees of economicajl t iex-penditui-e. Men are sitting m Pekingnow waiting for fat . . biJJets^M,,-. p^Brlookers. Their posts E , y(4iiKfeMrv<SWP a - It may be laid down as inevitable that any large 'Bums lent to China m her present state will mostly vanish into the pockets of her own officials. And after? What will happen? When China sinks under a 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 be the case of Egypt over again. Europe poured money into tho hands of. lsmail while he Avas misgoverning a naturally rich

country. When the liabilities, became j overwhelming someone else had to step | m 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; and the surest way to smash up China, is to lend her vast sums which she cannot repay. We see at work m the Far East the very newest form of conquest, that of con^quest by finance. There will be a great scramble for territory. There will probably also be a war over the spoils. A , dual control failed m Egypt. How can six Powers control the internal administration of China? Six European Powers cannot even agree about the affairs of Crete. "What has England to gain from acting as cat's-paw. m a subtle scheme for the ruin of China?" the contributor asks. ' "Why should we find the money for China's undoing? We cannot control a large slice of China. We have neither the men nor the • strength ... to spare. Onr.sole interests lie m the preservation of some form -of independent government m China, and to;.that -end we should do our -utmost to prevent her from plunging into hopeless debt. Tlie British and the American peoples do not want to isee China broken up, and could. ,stop t'his'thin^ if they realised whither "their Foreign Offices were -dragging them. If China passes under foreign control the chief prizes will fall to her next-door neighbors. We shall have done the- paying.'-'/ 7 , '