copy.
(7 1278/427/10).
Confidential.
1
268
MEMORANDUM,
The Foreign Office has wired te Peking for information about an alleged agreement between China and Japan concerning
the purchase of the Company's cables after 1930. The telegraphic reply from Peking was that the Legation there doubted this documents authenticity which evidently amanated from the Shangtung Commission. A written report from the English begation there is expected.
The Danish Minister is requested to enquire in the Foreign Office whether such a document has been received or not, and in the affirmative to obtain the principal contents of same.
Should the impression of the Peking Legation be that the whole thing is false alarm, the Great Northern Telegraph Company begs leave to say, that they are of a different opinion. (1) The Japanese Government is using every financial pressure
possible on China. The Chinese Telegraph Administration has since the year 1918 raised short term loans from Japan up to the extent of 36 Million Yen. On the 29th of April this year, the Chinese Telegraph Administration is obliged to repay the sum of 20 Million Yen. China will not be able either to refund
the capital nor the interests on this or other later loans, for which the whole of the Chinese Telegraph and Telephone system has been mortgaged.
The Japanese are threatening through their Legation
in Paking the Chinese Government to take over the control of the Chinese Telephone system (which may lead also to the
eventual/
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