[Enclosure]
Identic Note from the British, French, Japanese, and Russian
Ministers to the Chinese Acting
Minister of Foreign Affairs
Sir: The Government Gazette of February 23rd. contained a Presidential
Mandate promulgating regulations for the issue of 8th Year
Internal Loan Bonds, and Article 5 of these Regulations provides
[Page 506]
that Salt Surplus
Funds shall constitute the security for the repayment of
principle and payment of interest on the loan.
I have since been approached by … Bank, one of the signatories to
the Reorganization Loan Agreement of 1913,92 which desires me to protest against
the designation of these funds as security for this loan, on the
ground that such a step infringes the terms of that Agreement
and is prejudicial to their interests. The Bank’s complaint
appears to me a justifiable one, and for the following
reasons.
Article 17 of the Reorganization Loan Agreement provides that:
“In the event of the Chinese Government desiring to issue
further loans secured upon the revenues of the Salt
Administration or to issue supplementary loans for
purposes of the nature of those specified in Article 2
of this Agreement, the Chinese Government will give to
the Banks the option of undertaking such loans”,
etc.
In the present case the surplus revenues of the Salt
Administration have been designated as security for the loan
with the result that the stipulations of the Article above
quoted are thereby infringed and the value of the Salt revenue
as a future security impaired.
Furthermore, the Government Gazette of
March 8th published a letter from the Ministry of Finance to the
Inspector-General of Customs in which the undertaking was given
that the proceeds of any future loan secured upon the Salt
Revenue shall be charged with a half year’s installment of the
service, of the present internal loan. I am compelled to take
exception to any such provision, which introduces a new
condition into the terms of Article 17 above quoted.
In view of the above it becomes my duty to protest against the
steps recently taken by Your Excellency’s Government in
connection with the 8th Year Internal Loan, and to request their
immediate cancellation, in order to conform to the terms of the
Reorganization Loan Agreement of 1913.
Trusting to receive an early reply, I avail myself [etc.]
