CO129-470 - Public Offices - 1921 — Page 295

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Copy.

373/7/10).

Paraphrase of telegram No.44 from Sir B. Alston,

Peking, 29th January, 1921.

293

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Confidential,

My attention has been directed by Inspector General of Customs to the financial straits in which Chinese Government

are situated. It is now some years since Central Treasury,

which depends almost entirely on surplus from salt and customs

revenues after foreign obligations have been met, received

any thing from the Provinces; and the danger that salt revenues. may be seized at any moment by Provincial governors is

increasing. The present Trade depression and depreciated exchange will probably cause diminution of customs surplus.

Moreover, the Central Government dare not refuse the

military Governors' constant demands for money in addition

to the provincial revenues which they spend in order to pay

their troops.

There are unsecured liabilities on every side, for

example $10,000,000 which Navy Department has incurred. Other

Ministries have acted similarly and in this way only has

Administration been carried on, and no provision for the

redemption of those loans has been made. Again in order to

provide for transfer of late Chinese Minister in London to

Washington Wai-Chiao-Pu had to ask Hongkong and Shanghai bank

for a loan of £5,000 in fact one of their foreign represen-

tatives can now be paid.

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Inspector General of Customs is of opinion that default

cannot be avoided because the loans for which Ministry of

Finance alone is responsible without taking into account those

which other Ministries have raised, are so large; for instance

there/