§ 14. Mr. MOREING
asked the Secretary of State for Foreign Affairs who are responsible for the payment of interest and amortisation of the Peking-Mukden Railway loan; from what source payments are made; whether any offer has been made by the de facto Government of Manchukuo to bear a proportionate share of the charges; and, if so, whether such offer was accepted by the Chinese Government?
§ Sir J. SIMON
The Peking-Mukden Railway loan is a first charge upon the railway and its revenues, and principal and interest are guaranteed by the Government of China. After the military operations in Manchuria in the autumn of 1931, the service of the loan was effected by that part of the railway lying within Manchuria for which a separate railway administration—the Feng Shan railway—had been set up. The payments were made largely out of the funds accumulated by the Peking-Mukden Railway in Mukden upon which an embargo had been laid. These were exhausted about February, 1933, and about the same time it was arranged that the necessary payments should be made by the recently established Railway Control Board. About the middle of 1933 an arrangement was made between the Japanese military 1569 authorities and the Chinese administration of the railway, in connection with the resumption of through traffic, in accordance with which the Feng Shan railway assumed full responsibility for the service of the original Peking-Mukden Railway loan, while the Chinese administration of the remaining portion of the railway was to be responsible for the various other loans secured upon the surplus earnings of the railway. This arrangement is, I understand, being carried out so far as the Peking-Mukden Railway loan is concerned.
§ 15. Mr. MOREING
asked the Secretary of State for Foreign Affairs what reply His Majesty's Minister in China has received from the Chinese Government to his representations on the subject of the continuing default on the Tientsin-Pukow Railway loan; whether he has yet received any information regarding the earnings of the railway during the past 12 months; and whether, as promised, payments are being regularly made into the reserve account intended to serve for the eventual liquidation of the loans?
§ Sir J. SIMON
In reply to renewed representations on the subject from His Majesty's Minister, the Chinese Minister for Foreign Affairs, in a note dated the 2nd December, 1933, stated that every effort was being made to provide for payments into the special reserve account intended to serve for the eventual liquidation of the loans. Certain comparatively small sums have been deposited irregularly and the instalment due for March, 1933, is now completed, the total account now standing at $509,352.83. No information regarding the earnings of the railway during the past 12 months has yet been received. The position is far from satisfactory and constant efforts are and will continue to be made by His Majesty's Legation to secure an adequate liquidation of the sums in default.
§ 16. Mr. MOREING
asked the Secretary of State for Foreign Affairs if he has any information as to the present position with regard to arrears of interest due to British bondholders from Chinese railways; and whether any of the railways in arrears have recommenced payment and, if so, which?
§ Sir J. SIMON
On 7th February, 1933, when the last comprehensive estimate was made, the arrears of interest due to British holders of Chinese railway bonds was understood to amount to more than £5,000,000 sterling. Since then, in spite of a few repayments made on the Shanghai-Nanking Railway Loan of 1904, the Honan Railway Loan of 1905, the Shanghai-Hang-chow Ningpo Railway Loan of 1908 and the Tientsin-Pukow Railway Loan (German issue of 1908), I regret to say that the total amount of indebtedness has somewhat increased. His Majesty's representative in China has, under instructions from His Majesty's Government, recently impressed once again upon the Chinese Government the necessity of taking the situation in hand without delay, and has suggested that the competent departments of the Chinese Government should forthwith, in consultation with the Commercial Counsellor of His Majesty's Legation, devise means for resuming the interest services of the loans now in default.