CO129-344 - Public Offices & Foreign Office - 1907 — Page 617

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the prospectus of a loan could not contain the name of any

bank not mentioned in the loan contract.

As regards the construction tenders we held that, if

the payments were deferred beyond at most one year after

the work was taken over by the railway's engineer, such

contracts were really loans in disguise

-

and, as I point-

ed out, loans at high rates as the contractor must insure

himself against contingencies during the period of suspens

The Viceroy let us gather that his real desire was to

avoid having to apply forPeking sanction for further loans

and at the same time to placate the Japanese who professed

to be able to advance up to seven million yen in such con-

tracts. His Exellency welcomed the suggestion that the

Hongkong and Shanghai Bank might finance such work equally

with the Yokohama Specie Bank, and he seemed disposed to

agree to cover advances by second mortgage bonds of the

Ya Li Chu an arrangement which Mr Willier thought render

ed, the scheme a sound business proposal so long as the

amount at any time outstanding and the periods of the ad-

vances were kept within reasonable limite.

I have the honour to be,

Sir,

Your most obedient,

humble fervant,

(5)S. H. Fraser.

Consul General.