would be in the best interests both of the Chinese Government and of the Governments which they represent.
With a view to expediting the consideration of such requests in the future, my colleagues would be glad if the Wai-chiao Pu would arrange that each application for release should be accompanied by an official statement showing the condition of the revenue and the total available surplus at date.
BEELAERTS VAN BLOKLAND.
[This Document is the Property of His Britannic Majesty's Government.]
CHINESE LOANS AND CONCESSIONS.
CONFIDENTIAL.
208
[January 4.]
SECTION 1.
[2555]
(No. 366.) Sir,
No. 1.
Sir J. Jordan to Mr. Balfour.-(Received January 4, 1918.)
Peking, November 12, 1917. MR. ALSTON, in his despatch No. 276, Confidential, of the 27th August last, laid before you an account of the first application made by the Chinese Government for a release from the surplus customs revenue of the sum of 2,000,000 taels, and gave Bome description of the difficulties which arose before that request could be complied with.
Since that date one further application for the release of a similar sum of After consideration by 2,000,000 taels has been made by the Chinese Government. the Diplomatic Body, this application was equally agreed to, on condition that the payments, as in the case of the first release, should be spread out over a certain period of This stipulation was undoubtedly desirable in order to prevent the dislocation of the silver market through the sudden calling in of so large a sum by the banks.
A copy of the note to the Wai-chiao Pu, dated the 3rd October, is enclosed, together with that from them of the 12th September, to which it was an answer.
time.
In giving his assent to the draft of the above note, the Italian Minister, who it will be remembered had been responsible for the difficulties that were encountered with regard to the first release, suggested that in the event of future applications of this nature they should be accompanied by an official statement showing the position with regard to the security for the payment of the obligations secured upon the customs revenue. This view was supported by certain of his colleagues.
On the 15th October the Chinese Government made their third application to the Diplomatic Body. This time their request was couched somewhat differently. They suggested that, in order to simplify matters for all parties concerned, the net balance of all customs revenue received during the October-December quarter 1917 should be automatically transferred to them at the end of each month, as in the case of the salt surplus.
This request was brought up for discussion at a meeting of the Diplomatic Body on the 8th instant, and, as a result of the decision then come to, a note was addressed to the Wai-chiao Pu explaining that it was considered preferable to adhere to the Copies of procedure hitherto followed with regard to the release of customs revenue the notes exchanged are enclosed. You will observe that opportunity was taken to suggest that matters would be no doubt expedited if in future all applications of this nature were accompanied by an official statement showing the conditions of the customs revenue and the total available surplus at the date of the application.
I would add that one of the several considerations which led to the decision of the Diplomatic Body to refuse the request of the Chinese Government was the possibility of trouble with the South should the Revolutionary Goverument at Canton choose to take the view that the surplus customs revenue-partially at least drawn from the South itself was being applied to their destruction by the North. I was aware that Mr. Agle feared that such a suspicion, if aroused, as was in his opinion highly probable, would lead to an interference by the South in the customs organisation in that region, Mr. Aglen has, I know, long been extremely nervous about this, and he has informed signed me confidentially that the Commissioner of Customs at Canton already holds a and sealed letter of appointment from him authorising him to take charge of the Southern Customs and run them as a separate administration temporarily should events force him to do so-i.e., a separation of the North from the South.
A copy of this despatch has been forwarded to His Majesty's Ambassador at Tokyo.
(Copy to Tokyo.)
[2764 2—1]
I have, &c.
J. N. JORDAN.