Page:The Truth about China and Japan - Weale - 1919.djvu/138

 scandalous manner. Thus, in the case of the £25,000,000 sterling Reorganization Loan of 1913, it was discovered by chance that the instalments paid over in Peking were placed to China's credit at a profit of 3 per cent. to the participant banks over and above legitimate commission and over and above the true market-rates. Similarly, by various intricate juggling methods, nominally made in the interests of the foreign bondholders, instalments for the service of foreign loans must be paid monthly into the foreign issuing banks, who allow the Chinese Government 2 per cent. annual interest, and thus make privately at least 5 per cent. per annum from the use of the Chinese Government's moneys. Furthermore other abuses have grown up. Thus in 1915, nominally to safeguard the interest of the bond-holders and in defiance of the particular loan agreement involved, the foreign banks stopped payment to China of ten million dollars of salt surplus, and for four years have held this amount in their coffers as a 'reserve' to pay Chinese coupons, allowing China 2 per cent. per annum on this amount and making at least 5 per cent. net profit per annum on the transaction. The issuing banks have therefore been placed by their governments in the illegal and