These threats) have not. prevented China from progressing steadily with [preparations for her own develop: ment, Last year's debt schemes the -long defaulted railway loans. were clearly paving the. way - for restoration of Chinese credit and a possible new. to the London. ial-Hangchow-Ningpo Bonds, which, had already been issued In Shanghai on January. 12, may be, taken as 0 feder. "It would: not be surprising if further new loans were to follow in due course. Meanwhile the special attention which the Export Credits Guarantee Department 4s giving to China as a market sug gests that our Government would not be averse to Chinese Loans, Out of confusion of the past ten Years therefore the investor may con clude. that the Chinese Government steadily reducing the main elements risk which had appeared in Chits nese Bonds, 'Against the risk of continued disorganization with the wtimate possibility of raids on the Customs funds Nanking has-been able to extend {ts rule over a greater' area than any government in recent years, Against the risk of excessive na-Honallem which, would "deprive the customs security of its' specia) strength the' Government his shown {self ready to leave the 'Customs administration in foreig hands and. [benefit by the resulting credit. And against the external' menaces of Japan and the Communists Nanking has stood much firmer, than had bagh What is now required of the present polley, More Than Normal Risks As a whole the Loans are typical nineteenth century iesues—though in point of date several were actually issued in the twentieth century. One whole class was issued directly, for the great nineteenth century activity, of railway construction and a large pant of the nonerallway loans were ment of the loans were fact destined for railway develop. Secured on the now. obsolescent Principle that foreign administration within a national government would [Provide credit which the national government itself could not hope fo secure.
Consequently the risks to which the Joans have been exposed in recent years have been more. than normal economic chances. The émergence of the Nanking Government as the Central Government in China during 1928-29 was accompanied by a nationalism which seemed to threaten the foreign administrations which handied the Customs revenues and which actually transferred the Salt administration from foreign 10 Chi nese hands. The civil disturbance which preceded and followed the establishment of the' Nanking Government left little room for railway reorganization or improvement while the other preoccupations of the Government itself made them more inclined to disturb the bond holders with demands for abolition of extraterritoriality than to court them in 8 lively appreciation of loans to come.
Text read from the printed page and cleaned; old type leaves the occasional error.