ct ina's Difficulties in Meeting Loans Shanghai, May 1. po "China Incident is nearing the end of its second year.
ypan is now master of the Chinese coast line; she has seized most of China's railways; and she has imposed her economic. and political will, though with equivocal success, in the occupied areas. Traders quickly learned what the "Open Door" means n China today. Now it is the investor's turn to face the same problems. During the past two weeks, two defaults have occurred on Chinese obligations: the March coupon on the 5 per cent. ("Crisp") gold Joan of 1912 has not been met, and the April coupon on the Tientsin-Pukow Railway loan of 1908 (on which the resumption of interest payments was agreed only last August) has also been passed, states "The Economis Tnvestors, however, can hardly have counted on the transfer of funds for these junior securities in view of the position of the Customs loans. 0 which the Chinese Ministry of Fine tance announced, in the mkldie of January, the deferment of payment. 'The coicial. statement from Chungking recorded that China desired to pay' all her Customs obligations, and Was prepared to consider any' fair arrangement to meet them. But the Spokesman' proceeded to emphasize first. that the due share of pledged revenues must. be Feeeived from areas in Japanese con~ twal: secondly, that the Chinese currency must cease, China's senior obligations were thus in' Jeopardy, it was clear that, the Salt and railway teans could not hope for more favourable treatment.
when the Chinese Government de-"that view as confirmed recently Ghorea "hat negotiations, had been, initiated with a view to making some lireangement. for the service of the Customs and Salt loans. The Chinese Government does not contemplate, default; it fs prepared to make due provision according to its means. But it Is no longer able to make up from its own strained resources the substantial diversion of Customs re-Venues into the Japanese pocket, Granted China's economic difeullies, few bondholders would quartet with her attitude towards the debt.
In recent years, China has done much to strengthen her credit by offering Feusonable terms for resumed service on the railway loans, and her senior: obligations have enjoyed an unblemshed record. Chinese resurgence, unlike so many national movements, was not accompanied by the desire to rob foreign creditors. Indeed, last year, which was the blackest in China's modern history, the Treasury, tunable to obtain the release of pled= ed revenues from the Japanese col-ceters in the occupied Treaty Ports, made good the deficit for the Customs obligations. from—unattached resources. Reference to the Customs China Unsurprised By Hitler Speech Chungking, Apr. 22.
White the Chinese press today gives prominence to Herr Hitler's speech, editorial comment is unanimous. in declaring that "the speech contained nothing unexpected or important.
"the "Central Daily News." official corean of the Chinese Government, de-claves na loading article Herr Hitler's speech contain nothing which is deserving of special tention, Before his speech, we made i forecast that in the mediate future Germany would make hho sensational move, but that at the same time Germany would not re-Tinauish her right to freedom of ion. "Yesterday's speech only ce firmed our views.
Hereafter, Germany will adopt a extremely clastic policy. and wilt be ready. to negotiate at any time.
ly PX be the same time, however, Ge reserves the right to take swift and drastic, action at any time she "The "China Times* declares "IN is not what Herr Hitler said, but what Britain, the United States and France will do after Herr Hitler's speech that _matters.
"Will Britain and America consid the speech as a si appeas the Paper goes 01 "thereby 0 gratulating each other on an a Cipated period of peace?
Or will they remain firm in their onvietion that the Axis Powers witl ever ea-operate with others for fpeaee, and that the democracies must hereatter continue 10 a sue key to the future inten collections in 1938 gives no guide to the true position, Superficially. the foll_ in collections treme. under_ conditions deed, if the Chinese Government had Feceived the full sums ($254,570,000 against $342,900,000 in 1997) the pledged revenues would have covered oral Customs obligations with a comfortable margin. "But approxi-ely four-fifths of last yea Customs revenue was collected in ports under Japanese control." As a result of the fall of Hankow and Canton six months ago, "the residual Interest of the Chinese Government the Maritime Customs is nearer Jeeted in Japanese controlled ports last October amounted to 68 per cent. of the total. In the following month, the proportion reached 84 per cent, The final insult is provided parently well-authenticated. act Which suggest that considerable smugnting "of Fo mosan sugar into Shanghai has recently occurred, loss to the Maritime Customs of "several million dollars." The fact thatthe Shanghai Customs coll ons are at present impounded by Japanese docs not make this ro-velation more palatable to those investers who recall that the strength of the Chinese Customs loans was founded on' the integrity of the Maritime Customs service. then. it is not China's wile s, bat her ability, to pay which The immediate question, form should take pending hostilities? The. first ards the answer is to dis:
Tnerest and sinking.fund obligations on Chinese Customs loans for the current year, and to relate prospective revenue. The font below:—
Text read from the printed page and cleaned; old type leaves the occasional error.