[This Document is the Property of His Britannic Majesty's Government.
2
unreasonable conditions imposed by the foreign financial groups interested in China, in particular the demand for the hypothecation of revenues and the obligation to submit the accounts of Government railways for foreign audit and inspection, one cannot help suspecting that this resentment is in great measure due to less worthy motives, to a desire, in fact, on the part of those placed temporarily at the head of the great spending departments of State, accentuated by the increasing requirements of the Imperial Court, to obtain untrammeled control of the funds raised for railways or other productive enterprises. The present loan may indeed be regarded as a revolt on the part of the reactionary and less reputable elements in the Chinese Government against the tightening grip of foreign financiers on the nation's purse-strings, and if this be so, the negotiations now pending may mean the commencement of a struggle the outcome of which may have far-reaching effects on the economic development of China.
I have, &c.
W. G. MAX MÜLLER.
AFFAIRS OF CHINA.
CONFIDENTIAL.
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BLCS RrG 13 JAN 11
[October 25.]
SECTION 2.
No. 1.
Mr. Mar Müller to Sir Edward Grey.-(Received October 25.) (No. 174.) (Telegraphic.) P.
Peking, October 25, 1910. I HAVE not yet been able to obtain definite information on the subject of the loan mentioned in your telegram No. 135 of the 21st instant, but though I could get no details respecting terms and amount, I have learned indirectly from the United States Legation that they have been approached in regard to a large loan. For weeks past rumours of loans on a large scale have been current, and if currency and other projected reforms are to be carried through, recourse will have to be had to a large Ioan. Up to the present only small schemes have materialised for internal or provincial loans, such as the Birchal loan.
The American Minister expressed the opinion that no bankers would venture to float a loan for China without first securing sufficient guarantees and possibly also financial control of some kind.
It is not probable that a large loan would be concluded without the participation of the French, German, and British Banks, or without the negotiations coming to our knowledge, but it is a matter for regret that Mr. Hillier did not see fit in this instance to impart to His Majesty's Legation information which he considered sufficiently reliable to telegraph to London.
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