British policy and loans to China 1911–14

  • Peter Lowe


The most complex and frustrating part of Great Britain’s policy in the Far East between 1911 and 1914. concerned her membership of the international consortium for arranging loans to the Chinese government. The consortium had originally been formed at British instigation with the aim of terminating the extreme competition among foreign firms for loan business. The competition was undesirable from the British viewpoint, as loans were extended without adequate supervision of expenditure in China and thus complicated the relationships between the representatives of the powers in Peking with their own nationals and with each other, in addition to confusing international relations in the Far East. From the Chinese viewpoint, competition could be defended on the grounds that loans could be obtained on more favourable terms. Great Britain joined with France and Germany in 1909 to support official national groups for the conduct of all loan transactions. In 1910 the United States entered the consortium, owing to the Taft administration’s desire to exert more influence in China and hinder what were considered to be the selfish, ulterior designs of European diplomacy.


Chinese Government Loan Market Currency Reform British Group Loan Agreement 
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  1. 1.
    See Herbert Croly, Willard Straight (New York, 1924), a very sympathetic biography, portraying Straight in an attractive light. It is a valuable work, as much source material is directly cited, largely from the letters and diaries of Straight and his wife, Dorothy. It is only fair to add that most American policy makers shared Straight’s generous naïveté.Google Scholar
  2. 2.
    See E. W. Edwards, ‘Great Britain and the Manchurian Railway Question, 1909–10’, in EHR LXXXI (1966) 740–69.CrossRefGoogle Scholar
  3. 4.
    G. de Siebert and B. Schreiner (ed.) Entente Diplomacy and the World (1921) p. 36, Sazonov to Isvolsky, 14–27 Dec 1911. See also DDF 3e série, 11, no. 177, Vieugue to Poincaré, 9 Mar 1912; DDF 3e série, 11, no. 178, conversation between Poincaré and Isvolsky, 9 Mar 1912; and particularly DDF 3e série, 11, no. 334, note by Berthelot, 12 Apr 1912, in which he wrote of the dilemma facing France and spoke of the undesirable stimulus to Japanese ambitions that would result from the formation of a new loan consortium comprising Russia, France and Japan.Google Scholar
  4. 4.
    Note the questions in the House of Commons criticising the monopoly. A frequent critic was Lawrence Ginnell, the Nationalist (later Sinn Fein) member for north West-meath. See H.C. Deb. 6 Jun 1912, XXXIX 270–2; 13 Jun 1912, XXXIX 1023–4; 5 Jul 1912, XL 1583–4; 15 Oct 1912, XLII 1034. Note also the concern expressed by Sir Frederick Cawley, the Liberal member for Prestwich, Lancashire, 17 Oct 1912, XLII 1389;Google Scholar
  5. Sir Gilbert Parker, the Unionist member for Gravesend and Norman Craig, the Unionist member for the Isle of Thanet, Kent, 24 Oct 1912, XLII 2345–7. It should be added that Ginnell’s questions were inspired; his brother was an engineer involved in the construction of Chinese railways, and his questions and sarcastic observations on the loan consortium, especially on Russo-Japanese entry, were designed to embarrass the government.Google Scholar
  6. 5.
    See F. M. Huntington Wilson, Memoirs of an Ex-Diplomat (Boston, 1945) pp. 218–19;Google Scholar
  7. Arthur S. Link, Wilson: The New Freedom (Princeton, 1956) pp. 285–8;Google Scholar
  8. T’ien-yi Li, Woodrow Wilson’s China Policy (New York, 1952) Ch. 11. Huntington Wilson was assistant secretary of state and resigned on the issue. Secretary of state Bryan later told the British ambassador that Wilson had taken the decision because of the ‘undemocratic’ nature of the consortium, Bryce to Grey, 1 Apr 1913, F.O. 371/1543. As Link and Li emphasise, the futility of Wilson’s decision is shown by the fact that the United States had to rejoin the consortium in his second administration.Google Scholar
  9. See also Arthur S. Link, Wilson: The Diplomatist (Baltimore, 1957) pp. 5, 9, 18–19 for perceptive comments on Wilson’s naïve approach to foreign affairs.Google Scholar
  10. 1.
    See E. M. Gull, British Economic Interests in the Far East (1943) pp. 54–65. The British government’s approach to the problem of industrial loans was cogently and lucidly summarised by J. D. Gregory in a memorandum dated 19 Aug 1913, F.O. 371/1594: anyone interested in pursuing the subject in greater depth than is possible here should certainly read this memorandum which clearly summarises a very confused subject.Google Scholar
  11. 2.
    J. O. P. Bland, Recent Events and Present Policies in China (1912) Ch. XIII, especially p. 406; on Morrison, see pp. 132–3 above. For parliamentary criticism see H.C. Deb. 29 May 1913, LIII 434–6, when the bank was attacked by Norman Craig. The Bank was, however, strongly defended by Gersholm Stewart, the Unionist member for the Wirral, Cheshire, who had worked for the Bank, 450–1. In addition, note Bland’s letters to The Economist, LXXIV (27 Apr and 4 May 1912). It must be added that Bland and Morrison were hardly impartial, Bland in particular had certain grievances against the Foreign Office and the Bank.Google Scholar

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© Peter Lowe 1969

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  • Peter Lowe

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