The New York herald., 1921-11-24

z Special Correspondent 10 The Jtjt- Shinpo. |
Special Despatch to THE New York HERALD.
New York Herald Bureau. |
Washington. ID. c., Nov. %. J
week ago I ADVOCATED the revision
s Of the customs tariff of China and ven
tured the prediction that America might
assume leadership in obtaining this
revision. I had reason TO believe Japan
was in favor of revising the Chinese
tariff so as to relieve the financial
straits of the Government at Pekin,
hut that she hesitated to proffer such
n PROPOSAL because of her delica+e dip
Iomatic relations with China. America.
thought. was the only logical country
h 20 take the initiative.
The above prediction has come true
In the presentation by Senator Under
wood Of an American plan for the
restoration of tariff autonomy % China.
The next movement America may
make is to propose the inclusion or ad-
4 mission of Chinese banking interests
in the international financial consortium
organized in 1919 under the leadership
Z of Mr. homas Lamont.
\ The third step America may take
K for. the alienation of Chinas nnancial
y predicament is to ask other Powers to
cancel the balance of the Boxer indem-
y nitv. In all these proposals America
may count upon Japan's hearty CO.
operation.
HercuIean Task to Perform
S,,nposing all such favorable measures
were adopted for China through the
4 good will of the nations represented al
Z this conference. it would still De
g Herculean task to put her finances upon
sound base.
4 let us consider China's national loans
3 Trnder the old imperial regime the IN
4 debtedness of the Chinese Goverhinene
was small as compared with Wnat !.
: to-day. Up to 1900 the indepteoness -
3 .,nounted to s27S 775, 900. while by 1910 II
had increased to roughly s4O0, ,00o.Ooo. That
was the position at the time the repup-
lie was set up, soon after which emma
Indebtedness was again increased py
{. an international loan Georganization
Z loanO of s125, 100000. The foreign oeot
Y had by 1914 grown to $55O,OoO.0OO, but
since that time loan after loan has been
negotiated until to-day China's internal
as well as external indebtedness Is esti-
& mated to be many times that OF her pre-
& republican days.
According to the China Year BOOK TOT
d 1a20-H China's domestic and foreign
loans amount to billion dollars gold
4 at the present rate of exchange. 1t Is
estimated that since the establishment
Y of the republic in 1911 China has been
= borrowing at the rate of $5O.OOo.U0 gold
y every year.
The balance sheets of the Central
M Government of China shows enormous
deficit. When Mr.. Lamont was in
Pexin in April, 1920, Premier Chun told
him that the monthly administrative ex-
penditure of the Pekin government was
$l6,O00.000 Mexican as against an income
of 81, 900 900. Here was clear deficit or
$l0,0000O0 every month. The China Year
Book estimates the deficit for last
year at 100000 Mexican month.
Salaries I'm Arrears.
z In such circumstances the salaries OF
y officials are always in arrears. Many
officials receive no pay for five to ten
months. Chinese custom requires the
payment by all means Of salaries Of Of
\ ficials and allowances of soldiers before
the autumn festival which this year fell
4 on September 16 At that time salaries
B and allowances in arrears amounted to
$25. 100000 Mexican. To tide over this
difficulty the Pelin Government ap-
pealed to the Association of Chinese
. Banks, and seems to have succeeded to
raise at least part of the sum needed
On July 20. this year, the Chinese
3 Government issued a domestic loan act
q aid of native bankers. But the security
If offered was not satisfactory and the
Chinese bankers have not taken action
This is clear evidence that the Chinese
q Government has lost credit even among
native bankers.
The chaotic condition of China's finan-
* cial affairs may be judged from the fact
that Gen. Wu Peifu. unable to get the
necessary fund to maintain his army
from the Central Government, has arbi-
q trarily seized the receipts of the south
ern section of the Pekin-Hankow Rail-
+ way. a Government line.
Another instance Up to July, 1921,
"A the Treasury owed the office OF the
! President S2,70O,000. After repeated re-
quests the Presidents office received
Z check for only $50.000 but the Bank of
/. China refused to honor Il.
On August 26. this year. the Army De-
. partment claimed the payment of S77,-
100000, which has been in arrears for
two years. Needless TO say this has
never been paid.
Only Secure Income.
The only secure income of the Chinese
Government is the surplus of receipts
: from the customs tariff and the Salt
p Gabelle-that is. the sum left after pay
ing interest on various foreign loans.
Now the foreign loans secured by the
NOUS sum Of $1,1SO.O0O.0 900. ANNUAL in
terest on these loans amounts to some
$70,000.000, which must be paid from re-
ceipts from the customs tariff and the
Salt Gabelle.
Up to 1916 there was no surplus from
these receipts, but every penny was paid
for interest upon foreign loans From
1917 to 1920. mainly due to abnormal
Initiation of the value Of silver, customs
receipts increased phenomenally The
application of the new tariff n August
1918 also contributed to the enhance
ment Of the customs revenue. The re-
suit was that during hose four years
surplus from the cus--v.ti receipts ranged
from S8,571,0OO TO $4,000. 600. This
was what relieved China considerably
during the last few years rhe post
F ponement OF The Boxer Indemnify for
five years from 1918 mas also relieved
the situation.