will be remembered that the 4th Year. Loan, together with the 3rd Year Loan, was taken under the wing of the Customs in June, 1917, after the Allied Powers had remitted Boxer' Indemnity payments for 'a period of five years and after Russia had remitted' a third of her indemnity payments for a similar period. China's declaration of war upon; Germany in the same year cancelled or suspended indemnity payments to Germany and Austria and when, in 1920, China's diplomatic relations with Russia were severed, all Russian indemnity payments were suspended. It has generally been understood that the unremitted portion of the Russian Indemnity has, since 1920, been used for the service of the 3rd, 4th and 7th year domestic loans, while all other suspended indemnity payments, including Austrian, german and Russian, went into General funds and that, after the service of the various foreign loans secured on the Customs revenues, they went into the general surplus and were used for the service of the consolidated domestic debt. Last year, with the complete amortization of the 7th year short term domestic loan, a sufficient portion of the Russian indemnity was released to furnish security for a new Joan and the lith Year Domestic Loam was therefore put upon the market and was given Priority over the consolidated domestic debt, the former being secured upon revenues set aside, upon the books at least, for the Russian indemnity payments. while the latter is simply secured" upon surplus.
The Legations, acting as custodians lof Russfa's interests pending the recognition of a new Russia, might have claimed the right to be consulted before the Russian indemnity had been hypothecated; while, on the other hand, the consolidated bondholders might have argued that the Russian indemnity was forfeit through the _severance of diplomatic relations with Russia. Neither of these points was raised, however, so that consent by default was given to the 11th year issue by those who might have had
loan, grounds for opposing the Subsequent events and conditions have now made all persons interested in Chinese finance much more alert and watchful and with the first announcement of the proposed new loan of $5,000,000 over a period of 15 months to be secured upon that portion of the Russian indemnity released through the amortization of the 4th year loan, there was much hostile discussion of the proposal, both in the Legation Quarter and in Chinese banking circles, while Mr. Karakhan's recent present of the indemnity to "the Peking schools has brought the educationalists into the field with strong backing from the Chinese press.
Text read from the printed page and cleaned; old type leaves the occasional error.