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unsscared debt and thus improving China's credit in
the markets of the world, The existence of regional
loans ruined on the security of any part of the Customs
revenues would greatly complicate the problem of the
unification of China's finances on a national basis aná
foreign, and especially British, participation in sach
loans is therefore to be deprecated. Moreever so long
as so isany previous loans are in default, m many debts
of government departments for goods and materials
supplied remain unpaid and so long as no provision has
been made for the enormous unsecured debt that has been
piled ap in recent years the propriety of making fresh loass to any government in China mast be a matter of
grave doubt. The chief incentive to China to make satisfactory provision for these debts is that only by
a00083 tais means oua sbe restore her credit and gain access to
tae money carkets of the world, but if she finds to
important finansial institutions are ready to make fresh
loans on the security of revenues waian should properly
be applied to the liquidation of past deets tais
incentive saat in great measure be destroyed.
I understand that the Hongkong and thæu ghai
Banking/