Directory_and_Chronicle_1922 — Page 658

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1913, Dec.-Mitsui Bussan Kaisha

CHINA

1914, June-

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1913, July- Mitsui Bussan Kaisha

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1913, Nov.- 1903, Feb.-

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$765,707 88,400 150,000

150,000

100,000

500,000

1,000,000

The aggregate of the national indebtedness is no greater than that of some other countries with less resources, but the danger is that, without foreign supervision, the resources will not be husbanded, but frittered away on useless expenditure. Towards the close of 1918 the Powers agreed that no further advances should be made to China until a settlement between North and South has been completed. The observance of this undertaking has rendered administration since extremely difficult. Innumerable private sources have been approached for financial accommod- ation with unsatisfactory results. National bonds have been hawked about until they have depreciated lower than previous below-par quotations. Redemption of the 4th year Domestic Loan should have been commenced in 1918, but was not commenced till 1919. Likewise the principal of the Premium Bonds should have been returned, but was not. The feature of 1919 was the announcement that America, Britain, France and Japan would form a new Consortium. Associated with this proposition was a plan for the unification of China's railways. Japan, at first disapproved of both schemes, but in 1920 changed her attitude.

This chapter on finance would be incomplete without a reference to the preposterous currency reform promulgated in August, 1918, which contemplated the establishment of a gold currency with the Yuan or dollar as basis. A gold note issue was to follow, the reserve for which was to be furnished by Japanese notes held in the banks. All this was to be accomplished by the decree promulgating the scheme. Naturally, the Group Banks protested, and the scheme was dropped.

Budget Statements in China have yet to become the precise documents that they are in other countries. The last published was for the fiscal year ending June, 1920, when the total of the Extraordinary Receipts was $80,581,785 and the grand total of both the Ordinary and Extraordinary Receipts $490,419,786. The total Extraordinary Expenditure was $224,473,681, and the grand total of both the Ordinary and Extra- ordinary Expenditure $495,762,888. During the autumn of 1919 Parliament framed a Budget which showed a deficit of $120,000,000. To meet this it was proposed to reduce military expenditure by $20,000,000 and to introduce reforms in the collection of taxes which would yield another $20,000,000. For the balance a loan was to be raised.

The Maritime Customs and the Salt Gabelle are the only two sources of revenue for which exact figures are so far available. The Customs receipts for 1920 amounted to Hk. Tls. 49,819,885, as compared with Hk. Tls. 46,009,160 for 1919, the highest on record up to that time. The net receipts of the Salt Gabelle for 1920 were $79,064,103 -a decrease of $1,572,400 on that for 1919, but an increase of $7,498,583 on that for 1918. All obligations secured on the Salt Revenue were fully met, and the release of surplus funds handed over to the Chinese Government during 1918 amounted to $64,019,879. Of this sum, however, some 24 million dollars were either retained locally or appro- priated by Provincial Authorities or Military Commanders.

China had no foreign debt till the end of 1864, when a loan of £1,431,664. contracted from the Hongkong and Shanghai Bank, under Imperial au- thority and secured by the Customs revenue. Up to 1894 the total foreign debt of China was inconsiderable, but subsequently extensive borrowings had to be made to meet the expenses of the war with Japan and the indemnity, which was Taels 200,000,000 (at exchange of 3s. 31d.), with a further Tls. 20,000,000, for the retrocession of the Liaotung Peninsula. The last instalment was paid in 1898, and the total indebtedness of the country up to 1900 was £55,755,000, the principal loans being the Russian of 1895, the Anglo-German of 1896, and the Anglo-German of 1898, each of £16,000,000. The country's obligations in 1901 were increased by a sum of Tls. 450,000,000, the amount of the indemnity paid to the Powers to meet (1) the expenses of the Expeditionary Forces, and (2) claims for compensation for losses to missions, corporations, individuals, etc. Several Loans were subsequently obtained, chiefly for railway construction, and, as a result of the Revolution, China's indebtedness was increased by an international loan of £25,000,000. China's foreign debts are in various currencies and, owing to fluctuation of exchange, it is difficult to give the precise