CHINESE WAR INDEMNITY LOAN.

Tuapeka Times, Volume XXV, Issue 4254, 3 July 1895, Page 6

CHINESE WAR INDEMNITY LOAN.

We are now confronted with one of the most interesting and unexpected financial projects of modern times, a project which, if carried into effect, is destined to revolutionise the mercantile relations of a third of the population of the world. For a loan of £180,000,000 by Europe to China means the complete throwing open of the Chinese Empire to the influences of external trade. _ Such a loan is impossible of accomplishment without adequate security, and that security can be found only in the devolution of the control of Chinese financial and commercial affaire into the hands of a joint commission appointed by the lending States. The security of the Imperial Maritime Customs duties would in no way suffice, for, supposing that China had to pay 6 per cent., the annual interest charge would be £10,800,000, and the Customs revenue amounts to only about £3,600,000, against which the charge on account of interest and redemption ot previous loans is about £700,000. Thus against a possible annual interest charge of £10,800,000 (not to speak of asinkingfund provision), the balance of the Cus»- • tomsrevenueavailableisabout £2,900,000, and additional security for nearly £8,000,000 per annum will have to be found. But inasmuch as the European Powers are not likely to be foolish enough to trust the Chinese with so enormous a sum as £180,000,000 without good security, it follows that the financial administration of China will pass into European hands. The inferences to be drawn are : First, that inasmuch as £180,000,000 will take a great deal of spending (for only a portion will be wanted in hard money), and the spending will be on material, trade between China and Europe will be greatly stimulated ; secondly, thai? expansion of the import trade ■will tend to develop the export trade of China ; thirdly, that the removal of the barriers erected against the " red devils " will create newmercantile and nianufacturinglife amongst 400,000,0000f people ; and fourthly, that the remittance of silver for a portion of the loan will at least steady the silver market for a time. But China may not get the £180,000,000, or if she does it will be by instalments extending over two or three years. She may demur at borrowing in gold, but this is hardly likely, because silver is now on a low and natural basis, and because the rich goldfields of Western China may be developed sufficiently to make payment of interest in gold an easy matter. The course of this huge borrowing project will be watched with much attention. Once China become enmeshed in an indebtedness of £180,000.000 to Europe, her old exclusiveness will be broken up for good, and she will enter without reserve into the mercantile life of the nations. Japan, in humbling China, has taken a step likely to have far-reaching consequences, not the least of which may be the promotion of a general revival of trade. All the borrowings of China prior to 1894, amounting to £3,755,000, will have been paid 'off by the Ist prox., and the external indebtedness of the country is now £4,635,000, as follows:— 7 per cent, loan of November, 1894...£1.635.000 « per cent, loan of February, 1895 ... 3,000,000 For the service of these loans — interest and repayments—about £660,000 is required annually.— Argus.' ____ "Ah," said the casual caller, seeing the poet at work in the adjoining room, " the fire of genius is burning, eh ? " " No," said the poet's practical wife, " it is his cigarette that smells so." Doctor (to his patient) : " Pardon me, madam, but before prescribing I must know how old you are." Miss Antique: "Oh, sir, a lady is only as old as she looks." Doctor (amazed) : " Impossible, madam. You certainly must be younger than that." She: "Oh, see that scarecrow out theft-c in the field ! " He : " That isn't a scarecrow." She : "It must be ; see how motionless it is." He: "That's one of the 'unemployed ' at workj!" Prisoner: "Ef ye plaze, y'r anner, Oi wud loik to widdraw me pica of ' Not guilty,' an' put in a pica of ' Guilty.' " Judge: "Then why didn't you plead ' Guilty ' in the first place and save all this trouble ? " Prisoner : " Sure, y'r anncr, Oi had not heard the ividence."