893.51/4908
The American, British, French, and Japanese Ministers to the Chinese Ministry of Foreign Affairs 22
From statements which have appeared in the press, confirmed by information from other sources, it appears that the Chinese Government are contemplating the issue of a further internal loan secured upon that portion of the Customs revenues formerly required for the service of the German Indemnity and of recent years earmarked for the service of one of the earlier internal loan issues.
As lately as February 6 last the Undersigned Representatives of France, Great Britain, Japan and the United States had occasion to address His Excellency the Minister for Foreign Affairs in regard to the similar flotation of an issue of Treasury Notes and to protest against the continued monopolising of all available security for fresh domestic loans in disregard of the guarantees attached to prior foreign obligations now in default. The reply returned to these communications, to the effect that the interests of foreign creditors were not adversely affected, cannot be accepted as satisfactory, since it is self-evident that when there is only one source of revenue from which the creditors as a whole can hope for payment, every new lien created thereon for the benefit of new internal loan issues postpones pro tanto the expectation of such payment.
The undersigned Representatives are obliged once again to lodge the strongest possible protest against the issue of any new loan on the security of Customs revenues in the manner now alleged to be in contemplation, and they feel impelled to point out that the action of the Chinese Government in denying payment of any funds on their foreign obligations now in default while at the same time raising new loans for other purposes not only constitutes a breach of faith to their creditors but falls little short of a public dishonouring of the unpaid foreign and domestic debts of the nation, and is the more indefensible at the very moment when the consolidation of the unsecured and inadequately secured debt upon the Customs revenues is under discussion in connection with the proceedings of the Tariff Conference. The Undersigned Representatives cannot believe that the Government of the Chinese Republic are willing to appear in such a light, and they therefore request that they may receive immediate assurances that the loan issue in question will not be proceeded with.
- Copy transmitted to the Department by the Minister in China as an enclosure to his despatch No. 509, Mar. 25; received Apr. 23.↩