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3.
The foreign loans secured on the revenue of
the Chinese laritime Customs are for the most part gold obligations. Therefore, when in 1919 the banks' selling rate
for silver in China ross to 118 per Shanghai tael, and in 1920 to 9 par Shanghai teel, as against a maximum of 2/7.5 recorded in 1914 at the beginning of the Great War, the cost of the loan service was reduced nearly by one-half. This fact, coinciding with an increased collection of Customs revenue in 1919 and 1920, resulted in the rapid accumulation of a surplus balance of Customs revenue. In these circum- stances the procedure grew up of releasing part of the surplus to the Chinese Government at frequent intervals, after providing full cover for the standing debt charges. Thereupon the Canton Government agitated for a share in these windfalls upon the ground that a considerable portion of the Customs revere was collected in the Kuang-tung province; and it was eventually decided to divide the total available surplus in the proportion of 86.3% to the Central Government and 13.7% to the Canton Government.
4.
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Mary Chees
This arrangement continued until the spring of 1920, when a political crisis in Canton drove the Cantonese Minister of Finance, Dr. Wu T'ing-fang to Shanghai. Various claimants to the Canton Government's share of revenus releases then put in their appearance; and, it being impossible to decide between them the Canton share was held on deposit. By the end of the year 1920 it amounted to 2,513,950 Shanghai teels. There followed a heavy fall in the silver exchange the lowest rate in 1921 being in per Shanghai tael, and thenceforward the question of any future Customs surplus was removed from the sphere of practical
finance.
5
However, in September,1923, Dr. Sun Yat-sen,
then Generalissimo of the Canton Government, made a formal
Application
!