893.51/6068
The Chinese Ministry for Foreign Affairs to the American Embassy in China45
Memorandum
The Ministry of Foreign Affairs presents its compliments to the American Embassy, and has the honor to acknowledge the receipt of a joint memorandum dated October 17th from the American and British Embassies and the French Legation, relating to defaults in the Hukuang Railways Loan, in which it was stated that a further default took place in the payment of the principal and interest due on June 15, 1935, and that the total amount in default was then approximately £3,000,000. They requested the competent departments of the Chinese Government to make provision for the service of this Loan.
Despatches were addressed to the Ministries of Railways and Finance, from which replies have been received, stating: [Page 766]
“With reference to the Hukuang Railways Loan, inasmuch as the line of the said Railways is not completed and its income is very small, in recent times only one installment of interest has with great effort been paid each year. We have asked you in writing to transmit our replies to those concerned to the effect that special attention has always been paid to the Customs revenue pledged as security, and that at the present time there is not enough to go round.
“The issuance of the 24th Year Currency Bonds was an act to strengthen the foundation of the currency and was a matter governed by special circumstances. With regard to the issuance of the 23rd Year Customs Revenue Bonds, the sum of fifty million dollars of the 23rd Year Customs Revenue Treasury Notes which had previously been issued and later taken back was transferred and earmarked as the sinking fund for the Bonds. This was an arrangement of the national treasury to make ends meet. It is hoped that these circumstances will be duly understood.”
Aside from making separate replies to the others concerned, the Ministry of Foreign Affairs has the honor to make this reply for the Embassy’s information.
- Copy transmitted to the Department by the Ambassador in China in his despatch No. 117, December 4; received December 30.↩