CO129-510-10 Financial loan from Hong Kong government to Canton Provincial government 3-4-1928 - 3-8-1928 — Page 26

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unsscared debt and thus improving China's credit in

the markets of the world, The existence of regional

loans ruined on the security of any part of the Customs

revenues would greatly complicate the problem of the

unification of China's finances on a national basis aná

foreign, and especially British, participation in sach

loans is therefore to be deprecated. Moreever so long

as so isany previous loans are in default, m many debts

of government departments for goods and materials

supplied remain unpaid and so long as no provision has

been made for the enormous unsecured debt that has been

piled ap in recent years the propriety of making fresh loass to any government in China mast be a matter of

grave doubt. The chief incentive to China to make satisfactory provision for these debts is that only by

a00083 tais means oua sbe restore her credit and gain access to

tae money carkets of the world, but if she finds to

important finansial institutions are ready to make fresh

loans on the security of revenues waian should properly

be applied to the liquidation of past deets tais

incentive saat in great measure be destroyed.

I understand that the Hongkong and thæu ghai

Banking/