693.002/727: Telegram
The Consul General at Shanghai (Lockhart) to the Secretary of State
[Received 1:30 p.m.]
1017. Reference my 899, June 24, 5 p.m.; and 922, June 20 [29], 1 p.m. The Inspector General of Customs has supplied me with copies of an exchange of telegrams between himself and the Minister of Finance regarding the August 1938 installment of the Reorganization loan due July 18 and amounting to some 124,000 pounds. The Inspector General was directed on July 14 to again negotiate with the Japanese authorities direct for approval of the withdrawal from the Shanghai customs revenue deposited with the Hong Kong and Shanghai Bank of the amount needed to make up the difference between the percentage allotted by the Ministry of Finance for payment from the revenues of the unoccupied ports and the total amount due. It will be recalled that Japanese consent was obtained for such action on the July installment. The Japanese authorities, however, declined to consider the question of advancing loan quotas or to again consent to the payment of loan quotas from the deposits in the Hong Kong and Shanghai Banks unless the Anglo-Japanese customs arrangement was implemented especially with respect to the payment of the Japanese Boxer indemnity and the transfer to the Yokohama Specie Bank of revenue balances now lying in the Hong Kong and Shanghai Bank. Consequently on July 18 the Inspector General [Page 738] paid the August installment of the Reorganization loan in full from funds available from remittances accrued from non-occupied ports. Copies of this exchange of telegrams are being forwarded by mail.
Repeated to Hankow, by mail to Tokyo and Peiping.