Page:The Truth about China and Japan - Weale - 1919.djvu/137

 the number of participating countries to five. Since the world-war Germany has, of course, had her partnership in the official consortium cancelled; and the bankruptcy of Russia likewise precludes her from being a sponsor of any Chinese loan.

But this last remark brings up an essential point. These semi-official loans to China, although nominally made by a four-Power group, (which became a six-Power group and finally a five-Power group,) are simply in the hands of certain favoured banks supported by their Legations. In the case of Russia, the Russo-Asiatic Bank is the sole participant; and as this institution is largely owned by French interests, so far from Russia dropping out of Chinese loans, in spite of the fact that it may be a quarter-of-a-century before financial stability has returned to the Bolshevik-ridden country, the French interests concerned are determined that Russia, in the person of a single bank, shall remain a nominal participant, as rich profits accrue from the handling of Chinese issues.

The following should make this clear. The loans, being gold-loans, are paid over to China in silver-credits at exchange-rates which are 'worked' by the banks in an admittedly