A Defaulting Railway the Editor of the *Nonen-Crtwa DAuLy News!"
Sin—On May 3 last T wrote letter under the above heading which you were good enough to publish in Sour esteemed Journal. 1 asked if ing to do the "hat lau tree times a Time showed that the "hat trick interest payment
was easily, accomplished and. certainly looks as ifthe defaulting habit is to be repeated next December.
Many letters, articles and statements by various parties have since appeared in the press, but little of a satisfactory mature 20 far holders. are ivectly concerned resulted with the one exception the announcement that from October 1, an extra. 24 per cent. making a ectal of 74 per cent, of the learnings is to be set aside. What, TF'would be glad to: know is it being set aside for? If interest. payments fare to be Tesumed immediately, a they "can "and" should be, ov 0 Jeurrent revenue, and if the' 7) per feet. is being set aside in addition pay off the sums in default, well and good, it isa step in the vight direction but anything less than this is surely definitely wrong, It seems to be quite forgotten that the "Chinese "Government. has guaranteed the regular payment of {nterest to bondholders in any event.
The present Director. recently lannouneed that, the Sino-Japanese hostilities in Shanghai last year resulted in Joss of physeal Broadd on toa lous of trae 6 mated at around
$5,600,000 and that the greater part fof the rehabilitation caused bythe Sino-Japanese hostilities has been aid for out of This particular bridges" and some of the buildings having been totally destroyed.
'Now in all conscience may T ask this reasonable? Should the Bond= holders or the war machine pay? 'To my mind there is no question at alt even though the Government hot' guaranteed the payment of terest to bondholders in any event, The Director also hinted at some big schemes he had in mind namely, double trucking of the NS.R. and the construction of - wharves "at Woosung but for which fresh loans would be necessary. Obviously fresh Joans will not be Zortheoming under present conditions and what I fear is that double tracking, ete, will be paid for out of ordinary revenue and side tracking of the bondholders interest. will continue. guaind ow A conundrum, lay's. issue of your good. "North. [China Daily News" it is stated inter-dig that "the whole amount of the 1929 net profit'of the two railways was reported to be $498,890.20." 'This "raises the "query: What happened. to the railways' cornin in 1929 as from the Director rent referred to above about $9,600,000 was taken out of ordinary vemie for extraordinary "ex:
for the period" January, 1031, to August 1982, despite the fact that the loss of trafic' (presumably non-payment by the Government for the ase of the Railway's well as the lose of commercial trae) " was $5,600,000 on the N.S.R. alone during the same time, 1929 was a good year.
Shanghai, Sey the future ness and prosper ity of China.
Text read from the printed page and cleaned; old type leaves the occasional error.