Office of the Historian

File No. 893.51/1896

The Minister in China ( Reinsch) to the Secretary of State

No. 1996
Peking, April 12, 1918.

Sir: I have the honor to enclose a list of loans made to the Chinese Government during the year 1917, and during January of the present year.

I have [etc.]

Paul S. Reinsch
[Page 167]
[Enclosure]

Recent Loans to China, 1917–1918

1917

Date To By Term Interest (per cent) Issue price Amount Security Remarks
1 Jan. 20 Board of Communications Japanese bank group 3 years 7½ Yen 5,000,000 $1,500,000 worth of shares in Bank of Communications; $4,000,000 Chinese Treasury bonds
(a)
Adviser appointed to bank
(b)
Option on future loans to bank.
2 June 16 Ministry of Finance Four group bank $2,000,000 Salt revenue Now repaid.
3 Aug. 28 Ministry of Finance Japanese bank group 1 year 7 Yen 10,000,000 ($5,820,000) Unpledged receipts of salt revenue This was called an advance on the second reorganization loan: issued in form of Government Treasury bills.
It was advanced for “Administration purposes,” but four-fifths of this was actually devoted to military expenditure.
4 Sept. 28 Minister of Communications in his capacity as Director of Bank of Communications Japanese bank group 3 years 7½ Yen 20,000,000 ($12,000,000) $25,000,000 Treasury bonds held by bank and guaranteed by Government
(a)
Issued without commission, but owing to exchange Chinese will only receive about 60 per cent in dollars of yen amount.
(b)
This loan is supplementary to No. 1 of Jan. 20, supra.
5 Oct. 17 Chinese Government Seven foreign group banks 7 Shanghai taels 700,000 For flood relief, Province of Chihli.
6 Oct. Minister of Finance and Minister of Communications South Manchuria Railway Co. 30 years 5 91.50 Yen 6,500,000 (China to receive in cash yen 4,511,250, the balance being deducted to cover two unrepaid loans of April 1907 and November 1908.) Property of railway and its revenue For construction of Kirin-Changchun Railway.
7 Nov. 20 Chinese Government American International Corp. 20 years 7 90 Gold $6,000,000 Reclaimed lands and taxes of reclaimed lands For conservancy of Grand Canal; gold $2,500,000 to be issued in Japan; not yet issued.
8 Nov. 22 Ministry of Finance Japanese bank group 1 year 7 Yen 5,000,000 ($3,500,000) Revenue of three native customhouses For flood relief in Chihli and North China.
[Page 168]

1918

Date To By Term Interest (per cent) Issue price Amount Security Remarks
1 Jan. Minister of War and Minister of Finance Japanese Taihei Kumiai Syndicate 7 95 Yen 14,000,000
(a)
There was an additional 5 per cent commission, for unspecified purposes.
(b)
Arms contract.
Jan. Military Government of Chihli Japanese Mitsui Bank $1,000,000 Reported Kailan mining shares, but probably Lanchow shares For ministry expenses.
Jan. Japanese Mitsui Bank $1,000,000 The Japanese Company provided $1,000,000 worth of Japanese yarn to Chinese cotton spinners; repayment guaranteed by Ministry of Finance.
Jan. Minister of Finance Japanese Mitsui Bank 3 years 8 98 Yen 2,000,000 Gov’t Printing and Engraving Bureau Japanese company secures monopoly of supplies to bureau and Japanese control.
Jan. 6 Minister of Finance Japanese bank group Yen 10,000,000 This is supplementary to No. 3 of Aug. 28, 1917, above.