The explanation is that Mr. Liang Shih-yi suggested a series of funding loans, while the Consortium holds out for one big all-inclusive funding loan. This latter proposition would include over 200 millions in foreign loans upon which has either defaulted or is in danger of defaulting. It would include for instance the two American loans and the grand total of the Nishihara loans, which alone amount to about 150 millions (silver), plus: interest.
It has undoubtedly been the hope of the Chinese that a united China vis-a-vis to Japan in which the military party was subordinate to the vil government would eventually be able to repudiate these loans, which, for the most part, were unendorsed by any sort of " parliament and in some instances lacked even Cabinet approval. With the assembling of the list of obligations upon the Salt surplus, however, it has become apparent that the Chin Yun-peng Cabinet, during Mr. One's visit to Peking last year, established a precedent from which it will be difficult for China to recede. Mr. One got from the Chin Cabinet a confession that the debt to the three Japanese banks (the Industrial Bank, the Bank of Chosen and the Bank of Taiwan) was bona fide and was given a charge upon the Salt, covering interest on his loans, which amounted to eight or nine millions.
Tt seems inevitable, therefore, that any general funding scheme which the Consortium wil] be ready to consider will include all of the Nishihara loans, now held in what bankers call the "frozen" state by the three Japanese banks which have never been able to put a single bond upon the market.
Priority oF CAMs.
The question of the suggested consolidated debt's claim upon the Salt surplus as security in the scale of priority has also agitated many breasts, though, for apparent reasons it is not troubling the bankers concerned. Subject to correction, the consensus of opinion seems to be that the Shanghai Mint loan is the first lien, Sir Francis Aglen's million and 2 half per month for the service of the internal consolidated loan bonds the second lien, the 1 millions in treasury notes issued just before Chinese New Year with Sir
Text read from the printed page and cleaned; old type leaves the occasional error.