HC Deb 29 November 1933 vol 283 cc849-51

asked the Secretary of State for Foreign Affairs whether he is now in a position to make any statement with regard to the security of British loans which are dependent upon revenue from Chinese customs; and to what extent the security of these loans is being safeguarded now that customs revenues obtainable by the Chinese Government have been reduced through the loss of Manchuria?


As the answer is a long one and contains a number of figures I will, with my hon. Friend's permission, circulate it in the OFFICIAL REPORT.

Following is the answer:

There are two loans secured directly on the customs, namely, the Anglo-German 4½ per cent. loan of 1898 for £16,000,000 of which £7,123,625 was outstanding on the 1st January, 1933, and the 5 per cent. Reorganisation Gold Loan of 1913 for £25,000,000 of which £22,287,580 was outstanding on the 1st January, 1933. These loans are not in default.

The Anglo-German Loan of 1908 for the Tientsin Pukow Railway for £5,000,000 at 5 per cent., the Supplementary Loan of 1910 for £4,800,000 at 5 per cent. for the same railway and the International 5 per cent. Gold Loan of 1911 for £6,000,000 for the Hukuang Railways (of which £5,636,860 is outstanding) were originally secured upon certain provincial likin revenues but upon the abolition of likin became entitled under the loan agreement to an equivalent security in the shape of a first charge upon the increase of customs revenue consequent upon the revision of the customs tariff. These three loans have been in default for a great number of years. Likin was abolished on the 1st January, 1931, and the customs revenue had already been very greatly increased by the substitution in 1929 of an autonomous tariff for the former 5 per cent. treaty tariff. None of this increased customs revenue has yet been made available for the service of the loans in default. This was the position both before and after the loss of the Manchurian revenue. After the loss, in July, 1932, the Chinese Government imposed a surtax of 5 per cent. on the customs duties in order to assist in meeting the decline in receipts. The Chinese Government state that there is at present no surplus customs revenue available for the service of these loans. His Majesty's Government will, however, continue to take all possible steps to safeguard the interests of the bondholders in these loans.


asked the Secretary of State for Foreign Affairs whether, in view of the fact that the coupon on the City of Riga 4½ per cent. Loan has not been paid since 1917 and that Latvia has a favourable trade balance with Great Britain, he will insist upon the payment of the interest on the Riga 4½ per cent. when making arrangements for a trade agreement with Latvia?


This matter does not fall within the scope of the forthcoming commercial negotiations with Latvia, the object of which is primarily to bring about an increase in the volume of British exports to that country. The desirability of a settlement, however, has recently been impressed on the Latvian Government.


Why does it not come within the scope? Is not this a good opportunity to bring pressure to bear and see that the bondholders get their rights?


The Riga, loan is not a State loan. It is one raised in the City of London by the City of Riga. I think my hon. Friend will agree, therefore, that while we may press the desirability of a settlement, it is not a dispute between the Latvian Government and ourselves.


If Riga pays interest on money that we lend to Riga, ought not more Latvian goods to come to this country?