Office of the Historian

893.48/1027

The Department of State to the Chinese Embassy67

undated

The “Chicago Bank Loan” was made to the Chinese Government by the Continental and Commercial Trust and Savings Bank of Chicago, Illinois, under the provisions of a loan agreement and a supplemental agreement bearing the date October 11, 1919; it was issued in amount of $5,500,000 U. S. currency and was evidenced by “Republic of China Six Per Cent Two-Year Secured Gold Loan Treasury Notes of 1919”; it was secured by the Chinese Government in respect both to principal and to interest “by a direct charge on the Revenues of the Tobacco and Wine Public Sales Tax of the Chinese Government”, by a direct charge on the “Goods tax receipts from the provinces of Honan, Anhwei, Fukien and Shensi, whether receipts be in the nature of likin taxes, transportation taxes or other taxes or imports of like nature” and, in the event of a deficiency of funds derived from the Tobacco and Wine Tax, by agreement on the part of the Chinese Government to “make good such deficit from other sources of its revenue”.

The Chinese Government has not only failed to effect liquidation of this loan or to make any payments on it, but, in disregard of the loan agreement, it effected the extinction of a part of the security (likin) without having obtained the bank’s assent to the extinction thereof and it has failed and neglected to provide other and satisfactory security.

  1. Handed to the Chinese Ambassador December 19 by the Chief of the Division of Far Eastern Affairs.↩