¡
2
Meanwhile, a further point has arisen. The French Minister, accompanied by the Japanese Minister, called upon me a few days ago and represented that as the payment of the German portion of the Anglo-German Loans of 1896 and 1898 out of Customs funds would now cease, the moment had come when the question of the distribution of Customs Revenue among the international banks should be reconsidered.
According to the arrangement made in 1912, and recorded in Sir John Jordan's despatch No. 55 of the 30th January, 1912, the Customs Revenues, which are pledged to the service of the Franco-Russian Government Loan of 1895, the Anglo-German Government Loan of 1-96, and the Anglo-German Government Loan of 1898, lave been since that date paid into the Hong Kong and Shanghai Bank, the Deutsch- Asiatische Bank, and the Russo-Asiatic Bank at Shanghai as agents for the Govern- ments interested.
Since the rupture of relations with Germany, the German bank's share has been paid into the Hong Kong and Shanghai Bank, the latter now receiving two-thirrls and In view of the extremely precarious the Russo-Asiatic Bank one-third of the money.
position of the Russo-Asiatic Bank (mainly as a consequence of the fall in the value of the rouble and over-speculation) the Inspector-General of Customs is none too anxious to pay more funds than necessary into its care.
The above arrangement, amongst others out here, has no doubt been for a long time an object of jealousy to the French, and M. Conty sees the chance of getting some He had evidently enlisted the support of advantage out of the present situation. Baron Hayashi to endeavour to persuade me to agree that a redistribution of Customs Revenue among the banks, so as to include the Banque de l'Indo-Chine and the Yokohama Specie Bank, should be made a condition of the present release of these
funds.
I told my French and Japanese colleagues that there appeared to me to be no reason whatsoever for imposing any conditions to the release of the 2,000,000 taels now asked for. I said that I should in any case oppose their action on grounds of A reference to policy, and Baron Hayashi could but agree with me on that point.
Sir John Jordan's despatch No. 55 of the 30th January, 1912, will show that the Japanese Government reserved to themselves the right, at the time of the formation of the Bankers' Commission, to claim the inclusion of the Yokohama Specie Bank among the custodian banks at a future date. M. Conty accordingly reluctantly withdrew his suggestion, though he begged me to allow the question of redistribution to be considered on its own merita. I agreed to this so long as it was not to be in connection with the present release, but as one of the outcomes of the declaration of war and the consequent cessation of the activities of the German bank. Both Ministers accepted this arrange- ment, and they have now addressed notes to the Chinese Government in the above
sense.
3
Enclosure in No. 1.
ESTIMATE
Obligations.
(August 1 to December 31, 1917.)
Chatoms secured loans and indemnity Reorganisation loan (August,December)
TH
"July instalment paid in cash..
Total obligations
Assets.
(August 1 to December 31, 1917.)
Net foreign revenue collection, cash balance Estimated net foreign revenue (Eve months, 2,400,000 Sh. taela)
native Customa Ravenue (five months, 250,000 Sh, taels) La-kin cash..
1
Total assets
Sh. taels. 13,065,669.98 2,800,000.00 524,912,50
16,889,976.48
Sh. taels, 10,829.678-04
12,000,000.00
1,230,000.00
650,000+00
24,789,678.04
16,889,976.48
Estimated supplus, December 31, 1917 ..
8,849,701.56
Note.-Average net foreign revenue collection for seven months, January to July 1917
2,905,800-41
Average net native Customs Revenue collection for seven months,
January to July 1917..
•
++
287,617.92
Les obligations as above
Copy to Tokyo.
I have, &c.
B. ALSTON.
P.S.-Since the above was written the Italian Minister has consented to withdraw his opposition to the release and to make his claims the subject of a separate nego-
tiation.
B. A.
162