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the province of Shansi. The advantages of these various pro- Posals were discussed in turn, and the delegates concluded with the reiterated observation that "with regard to all the schemes described above it is, of course, essential that there should be a close scrutiny of the proposals by financial authorities
and a full examination by technical experts."
The enterprises referred to in the Exchange of
No one definite
Notes are of a totally different character. railway project is mentioned or recommended.
We are merely told
that the money is to be devoted to "rehabilitating and building
railways and other productive enterprises." Now the most seri-
ous objection to the "rehabilitation" scheme is that the Chinese
railways are deeply in debt to British and other bondholders,
whose claims will admittedly be a first charge on any future
earnings of the rehabilitated railways. There is no certainty
whatever that interest on the "loans" from the indemnity funds
will be forthcoming in the near or even in the distant future,
and meanwhile the Board of Trustees is left with no funds for
any of the cultural purposes mentioned in the Willingdon Report
except such monies as may po sibly be forthcoming from some of
the "other productive enterprises" in which the Chinese Govern-
ment may decide to invest half of all future instalments of the
indemnity.
It seems to be generally assumed that If the "re-
habilitated" railways are unable to pay interest on the indemnit
funds "lent" to the Purchasing Commission in London, the Chinese
Government will itself pay the interest out of its own resources,
and it has even been stated that the interest is to be fixed at
55. If this arrangement be adopted, all indemnity monies handed
over to the Commission will in effect be loans to the Govern-
ment of China, not investments in an industrial undertaking.
However this may be, no steps appear to have been taken as yet
for the issue of Government bonds or other securities to the
Board of Trustees; and if the impoverished state of the nationa