FINANCES OF CHINA.

New Zealand Herald, Volume LXIII, Issue 19405, 13 August 1926, Page 9

FINANCES OF CHINA.

COLLECTION OF SALT TAX. SEIZURE BY MILITARISTS. POSITION OF FOREIGN LOANS. [fbom our own correspondent. ] SHANGHAI, June 22. China derives a largo proportion o:f he* revenue for administrative and other purposes from a tax on salt. In the. days of the Manchus, the Viceroys and Governors of the Provinces were the administrators of the salt tax and were nominally supposed to remit the proceeds, after deducting the cost of their a>;lministration, to Peking. The total revenue, received by Poking annually in the " goocil old days," never exceeded 18 to 20 million dollars. In 1913 the collection of this salt revenue was placed under foreign supervision and the yearly income from this source now amounts in round figures to 86 million dollars, a somewhat different figure to that collected in pre-revolu-tionary days. The rates of salt taxation vary somewhat in different parts of China but tho standard rate has been fixed at two and a-half dollars per " pical" or 1351b. China has also used this salt fax as a security for some of her foreign loans, but there has been a growing tendency of late for the provincial military authorities to seize these salt funds for their own special benefit. During tho recent lighting, the collections from practically all of China's salt fields were consistently seized by tho militarists. Peking received certain funds from Nanking and Tientsin, but was compelled to " subsidise " the military authorities controlling these districts before this " privilege" was granted. The military governor of tho province of Chihli has now organised his own collectorata and instructed the salt merchants to ignore the Government offices established bv Peking. Only last week, Marshal Sun Chnanfang, War-lord of the five central provinces of Kiangsi, Amvhei, Chekiang, Fukien and Kiangsu (Shanghai), notified Peking that he proposed to retain tho salt revenuo for administrative purposes and that no further moneys would be forwarded until a stable Government had boen established at the capital. Tho Under-Secretary of State for Foreign Affairs was recently asked a question in the House of .Commons regarding the seizure of these funds by the militarists and it is reported that his reply was to the effect that " nothing had occurred to cause any fear that foreign loans secured on the salt revenue wore in .danger of default." It is estimated by an authority who is regarded as. rc>that Peking has sufficient funds in hand for the various loan services to last to the end of the current year, and that then, if the militarists still continue to help themselves it will mean tho collapse of the salt collectorate and tho consequent default on foreign loans.