CO129-409 - Governor Sir May - 1914 [1-3] — Page 75

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of a domestic loan of $25,000,000 to be raised by subscriptions from Chinese in Hongkong, Canton, and abroad, secured on the Likin Tax collectable at certain places in the Kwangtung Province

Bust and aggregating 82,600,000 per annum, subject to supervision by an English Officer to be paid by the Kwangtung Government of the revenue upon which the loan is secured and "of all matters connect -ed with the payment of the interest on, and the final repayment of, the loan itself". I enclose a copy of the rough scheme which the Merchants drew up for the consideration of the Provincial Goverrunent. The Treasurer has taken it to Canton.

4.

It appears that the idea of the Merchants is that in consideration of their raising such a loan the Kwangtung Government should grant them the privilege of establishing a Bank in the Province which should have a monopoly of the Provinci -al Government business. It will be observed that it is not proposed to utilize the services of a foreign bank in connection with the issue of the loan. The furnishing of satisfactory security may give trouble but if that difficulty is overcome and other details are arranged I venture to hope that His Majesty's Government will not place obstacles in the way of the employment of a British Official for purposes of supervision.

The reference to arbitration by this Govern-

I

-ment and His Britannic Majesty's Consul-General at Canton is, am given to understand, meant to suggest a foreign adviser who in this matter will see that the Kwangtung Government carries out its obligations. The suggestion indicates that without the guarantee of foreign financial advice and supervision of the loar Merchants will not subscribe their money.

5.

I have sent a copy of this Despatch to His

Britannic Majesty's linister at Peking.

I have the honour to be,

Sir,

Your most obedient, humble servant,

Romay

Governor, &C..