CO129-510-10 Financial loan from Hong Kong government to Canton Provincial government 3-4-1928 - 3-8-1928 — Page 39

[This Document is the Property of His Britannic Majesty's Government, and should be returned to the Foreign Office if not required for official use.]

Fron CHINA

Decode.

Sir M. Lampson (Peking)

11th July 1928.

D.

11th July 1928.

R. 9.00 p.m.

11th July 1928.

No. 741.

(R).

XXXXXXXXXXXX

Following from Canton.

Begins:-

Addressed to Peking No. 65, repeated to Hongkong.

Hongkong telegram of July 6th.

I understand that conversations have been in progress ever since Ho Tung visited Canton to discuss

loan in April last.

Commissioner for Foreign Affairs informed me that proposal was for five million dollars, of which three million from Canton merchants and two million from Hongkong. Period of ten months interest 7 per cent and issue price 95. Loan to be secured on the Wash- ington surtax and Chinese lendors to have some control over collection. He said that Marshal Li, before his departure, had refused these terms and negotiations had broken down but he has since told me that they may

be resumed.

Whilst local administration acknowledges control of Nationalist central government in theory, it is asserting large measure of independence in financial matters and foreign lenders may find the same security is offered by central government for other issue.

With the departure of Li rumours again current

regarding

38