E
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Copy.
373/7/10).
Paraphrase of telegram No.44 from Sir B. Alston,
Peking, 29th January, 1921.
293
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Confidential,
My attention has been directed by Inspector General of Customs to the financial straits in which Chinese Government
are situated. It is now some years since Central Treasury,
which depends almost entirely on surplus from salt and customs
revenues after foreign obligations have been met, received
any thing from the Provinces; and the danger that salt revenues. may be seized at any moment by Provincial governors is
increasing. The present Trade depression and depreciated exchange will probably cause diminution of customs surplus.
Moreover, the Central Government dare not refuse the
military Governors' constant demands for money in addition
to the provincial revenues which they spend in order to pay
their troops.
There are unsecured liabilities on every side, for
example $10,000,000 which Navy Department has incurred. Other
Ministries have acted similarly and in this way only has
Administration been carried on, and no provision for the
redemption of those loans has been made. Again in order to
provide for transfer of late Chinese Minister in London to
Washington Wai-Chiao-Pu had to ask Hongkong and Shanghai bank
for a loan of £5,000 in fact one of their foreign represen-
tatives can now be paid.
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Inspector General of Customs is of opinion that default
cannot be avoided because the loans for which Ministry of
Finance alone is responsible without taking into account those
which other Ministries have raised, are so large; for instance
there/