CO129-438 - Public Offices - 1916 — Page 185

179

observed the terms of the letters of lien which they have

given to British Bankers. The evidence that we have on

this point is not entirely conclusive, but it is a fact

that in most cases it has been impossible for the British

Bankers since the outbreak of war, to obtain re-delivery

in China of the goods financed by them under these

letters of lien. I do not know whether the same is true

in regard to any British firms in China. But even if it

were true that the obligations under these letters of lien

have in all cases been broken by the German fims, this

has certainly not been done with the consent or connivance

of the British firms to whom the letters of lien were

given.

Nor can it be said that the British Government,

by admitting the bills which financed these goods to the

privileges of the "cold storage" arrangement, was giving

"official approval" to the methods by which these trans-

actions were financed. The Government, indeed, has no

knowledge of the details of the transactions financed by

any of the "cold storage" bills. I fail to understand

therefore how the Committee of the China Association are

justified in their assertion that it is clear that "in

assisting the British Financial Houses, H.K.Government

are indirectly giving assistance to German enemy firms",

as I do not for the life of me see how these transactions

with German firms in China can be differentiated from

transactions with German finns in Germany.

The suggestion made in the closing remarks of the

Committee of the China Association that British financial

houses and Banks should be invital to give Mis Majesty's

Government

Government an assurance that they will, after the war, refuse

to give financial facilities to German firms in China, 18

one which, taken by itself, cannot possibly be entertained.

The question of the future commercial and financial relations

between this country and our present eneiales is one which

will doubtless receive the earnest consideration of His

Majesty's Government, but until a decision on this matter is

come to, it would be most unreasonable to expect British

Bankers and financial houses to give an undertaking during

the war that they will, after the war, refuse to give

financial facilities to German merchants in one particular

part of the world.

I should like to end this letter by saying that in

principle British Banks and financial houses would always,

I am aure, prefer to place facilities at the disposal of

British firms, rather than of firms of other nationality.

I do not know whether British firms in China have, or have not,

made use of these facilities to the same extent as German

firms; but if they have not, I presume this is due to the

fact that some of the British firms are so wealthy that they

are able to finance their business entirely out of their own

resources, while others are not of sufficient financial

standing to justify the extension to them of these facilities

Believe me,

B.P.Blackett Esqre.,

The Treasury,

Whitehall,

LONDON, S.W.

CB.

Yours very truly,

(5g1.) FREDK. HUTH JACKSON.

י