American Group Quits.

New York Times 100 years ago today, March 20, 1913:
Drops Chinese Loan Negotiations, Deferring to Wilson, Say Morgans.
    J. P. Morgan & Co. announced last night, in behalf of the Syndicate which had engaged to underwrite the American portion of the "Six-power" Chinese loan, that the group of banks and banking firms had withdrawn entirely from the negotiations. A formal statement, prepared by H. P. Davison and Willard Straight, partners in the Morgan firm who talked over the situation last week with Secretary of State Bryan, outlined the syndicate's position in the loan proceedings, and stated that the other five participants had been notified that the New York financial interests were definitely out of the field. This is their statement:

    "The American group, consisting of J. P. Morgan & Co., Kuhn, Loeb & Co.; the First National Bank, and the National City Bank was formed in the Spring of 1909 upon the expressed desire of the Department of State that a financial group be organized to take up the participation to which American capital was entitled in the Hukuang Railway loan agreement then under negotiation by the British, French, and German banking groups.
    "This group thus became interested in Chinese loan matters, not primarily for its own profit, but for purposes indicated by President Taft and Secretary Knox. As stated in President Taft's message to Congress of December, 1909, these purposes, in effect, called for the co-operation of the bankers and the 'indispensable instrumentality' which the American Government needed to enable it 'to carry out a practical and real application of the open door policy.' The Department of State considered that American cooperation with the banking groups of the several great powers enabled the United States to exercise a practical voice in China's affairs, and constituted the best guarantee for the preservation of China's integrity.
    "In pursuance of the policy so advocated, the American group, with the Administration's approval, entered into an agreement with the British, French, and German groups for the purpose of rendering financial assistance to China. In February, 1912, these four groups, at the request of their respective Governments, and with the consent of the Chinese Government, admitted Russian and Japanese financial groups to the negotiations for the reorganization loan, thus constituting what has since been known as the 'six-power' group.
    "Following the revolution, and despite the fact that the authority of the new republic had not been generally accepted, the American group joined with the other groups in making to the provisional Government substantial advances to enable it more firmly to establish its authority and to restore normal conditions throughout the country.
    "Meanwhile there had been in negotiation, during a period of many months, a loan agreement which, in its general terms, appeared last month to meet the approval of the six governments, of their banking groups, and the Chinese Government, and to be ready for signature.
    "These terms were intended to cover two points. The first was to enable the Chinese Government to reorganize its administration on an effective modern basis, to pay off its large outstanding debts, and to build up Chinese credit. The second was to protect the interests of American and European investors. For such protection, in the judgment of the governments and the groups, the only method was to insure, despite any possible recurrence of political unrest in China, the proper expenditure of the funds loaned to China, and to safeguard the handling of the revenues pledged for principal and interest of the bonds.
    "As announced in the statement given to the press yesterday, the present Administration at Washington, with a desire to be of assistance to China and to promote American interests in the Far East, has decided that these purposes may better be served by the adoption of a different and independent policy. As the American group had been ready to serve the Administration in the past, irrespective of the heavy risks involved, so it was disposed to serve the present Administration if so requested. But deferring to the policy now declared, the group has withdrawn entirely from the Chinese loan negotiations, and has so advised the European and Japanese banking groups."