YON
top Y.
Bo. 34.
Vice-Consul Combe to H. M. Minister.
C.0.
40473
REC2 READ
H. B. M. Cond-kendran,
Canton, lo vember 4th., 1912.
163
Sir,
On the 8th. ultimo as already reported in the Intelligence Report for the September Quarter 1912 the Provincial Treasurer, Mr. Liao Chung-k'ai, announced that it was the intention of the Local Government to establish before the end of the year a Bank of Kuangtung, the notes of which would ultimate- -ly redeem the depreciated paper currency now circulating in the market. It was the Tu Tu's intention at that time to obtain the necessary capital, £5,000,000 gold at 6%, from an American Syndi- -cate on the security of the land tax. This proposal was vetoed by the Central Government, who took special exception to the pledging of the land tax and general exception to provincial borrowing from foreigners. They instructed the Local Authorities to await the conclusion of a large loan" then under negotiation, a share of which would be allotted to the provinces, and further to consider all local taxes as national (Kuo Shui) pending specific classifica- -tion by Peking.
Demands on the Local Treasury are, however, so insistent that the Tu Tu was unable to accept the decision of the Central Government as final. In place of the land taxes he now proposes to substitute the Prefectural Duties (Fu Shui) estimated to amount to $700,000 per annum and also, if allowed, the taxes on pigs slaughtered (T'u Chuan) and sold (Chu Chuan), which are expected to realise £280,000 and $120,000 per annum respectively. From these sources he will thus command an annual sum of $1,100,000 to meet the interest and amortisation of the proposed loan.
The intermediary with the American Syndicate
is a Mr. C. S. Paget, a local architect of American nationality, who for some time past has been endeavouring to raise small loans
on doubtful security with British firms. Mr. Liao left for
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