[This Document is the Property of His Britannic Majesty's Government.j
CHINESE LOANS AND CONCESSIONS.
CONFIDENTIAL.
173
[December 11.!
SECTION 2.
[234714]
No. 1.
(No. 334.) Sir,
'Sir J. Jordun to Mr. Balfour.-(Received December 11.)
l'eking, October 23, 1917, WITH reference to your telegram No. 297 of the 15th August, I have the honour to forward herewith a copy of the agreement conclurled on the 28th August between the Yokohama Specie Bank, representing the Japanese group, and the Chinese Govern- ment for the so-called advance of 10,000,000 yen.
The text of the agreement has only now reached me, having been supplied to me by the Hong Kong and Shanghai Bank, who are responsible for the translation from the Chinese.
This advance by the Japanese bank s been spoken of throughout as being an advance of the prospective Second Reorganisation Loan; but I gather from Mr. Hillier that its status is not very definite beyond the fact of its being an eventual charge upon the proceeds of that loan if and when concluded, as stipulated in article 10 of the agreement.
The advance is issued in the form of Chinese Government Treasury bills, redeemable in one year from the date of issue and bearing 7 per cent. interest. The proceeds of the advance are to be devoted solely to administrative purposes for the months of July, August, and Se, tember of the present year in the manner shown in the statement annexed to the agreeinent. The Treasury bills are secured on the whole receipts of the Sa't Gabelle, with the exception of such receipts therefrom as are already pledged otherwise.
Mr. Hillier informs me that the pruceeds of the advance when converted into Chinese currency amounted to 5.820,000 Mexican dollars net. Of this, 4,000,000 dollars have been handed to the Ministry of War, 800,000 dollars to the military governor of Anhui, who is a notorious reactionary, and only 700,000 dollars have been expended on administrative objects.
There thus remain about 300,000 d-liars still in hand.
It is not without significance that, of an advance ostensibly negotiated solely for administrative purposes, well over four-fifths should have already been devoted to military objects, and that no attempt has apparently been made to exercise any control over any portions of the proceeds of the advance.
I have, &c.
J. N. JORDAN.
Enclosure in No. 1.
Agreement for Lorn of 10,000,000 yen made by the Japanese Group (Yokohama Specia Bank (Limited)) to the Chinese Government August 28, 1917.
(Translation of Chinese Text.)
WHEREAS the Chinese Government desires to borrow the sum of 10,000,000 yen as an advance of the Supplementary Reorganisation Loan which it is propose I to negotiate with the four banki g groups; and
Whereas the Japanese banking group is prepared to undertake the matter; Therefore the Minister of Finance, representing the Government of the Republic of China (her inafter called the Chinese Government"), and the Yokohama Specie Bank (Limited) (hereinafter called the back"), representing the Japanese banking group,
have drawn up this agreement at Peking, the clauses of which are as follows:-
+4
1. The bank undertakes to make an advance of 10,000,000 yen within ten days, commencing from the date of this agreement. to be paid over to the Chinese Govern- ment in accordance with the procedure laid down in article 4 of this agreement.
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