693.002 Manchuria/219: Telegram
The Consul General at Nanking (Peck) to the Secretary of State
[Received 11:10 p.m.]
116. Following is summary of important statement released by the Chinese Minister of Finance July 26, 6 p.m.: [Page 187]
Because of seizures in Manchuria and serious decline elsewhere the customs receipts for July are estimated to be about Shanghai taels 3,700,000 short of covering customs commitments. Net July customs revenue estimated under Shanghai taels 10,000,000 which is less than half average monthly net revenues 1931. A small deficit existed in June instead of usual surplus but situation during all July has become far more acute. Situation due mainly to the campaigned [callous] action of Japan in seizing the entire customs revenues of Manchuria amounting to approximately 2,000,000 taels per month. The current revenue situation demonstrates the error of statement made in some quarters that the Manchurian seizure will not result in shortage of customs revenues to meet loan and indemnity payments secured on customs. Yokohama Specie Bank branches in Dairen and Newchwang are detaining customs deposits accumulated before cus-tomshouses there were seized, alleging Manchukuo authorities have forbidden them to remit these funds to the Inspector General’s[?] account in Shanghai. The Bank of China was likewise ordered not to remit and the deposits thus detained aggregate about Haikwan taels 2,000,000. The increasingly serious effect of world depression upon some finances of the Chinese Government is thus aggravated by the Japanese seizure of China’s revenues solemnly pledged to meet international obligations. The statement concluded with the observation that thus far China has maintained the service of her obligations in spite of the fact that no funds have been received for many weeks from the customshouses seized by Japan but that the cumulative effect of the deficits are now affecting the ability of China to meet this unfair strain.