CO129-333 - Governor Nathan - 1906 [1-4] — Page 193

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the Viceroy expressed much dissatisfaction.

In the meantime the Viceroy had

taken possession of Chou's property in Canton and on the

7th. October had seized the coal at Tati which he claimed

to belong to Chou. There were at the time about 33,000

tons

in the store valued at $264,000 and $165,000 of the

mortgage to the Bank remained unpaid.

3.

Then ensued the correspondence of

which a copy is enclosed.

4.

The position taken up by the Vice-

-roy is that Fung instead of being the owner of the coal

at the date of the seizure was indebted to Chou in the sum

of some $70,000 odd on account of it, that the coal was

then the property of Chou and so forfeit to make good

public money he had embezzled and that the Bank's remody

is to proceed against Fung for the amount of their loan to

him that has not been repaid.

The position taken up by this

Government is that Chou's interest in the coal ceased be-

-fore it was mortgaged to the Bank but that even if it

did not and the partnership between Chou and Fung still

existed the mortgage was a valid one entered into by

the