§ 5 Mr. MOREINGasked the Secretary of State for Foreign Affairs (1) whether he is aware that the net earnings of the Tientsin—Pukow railway during each of the years 1932, 1933, and 1934 have been more than sufficient to pay twice the annual interest on the various portions of the railway's foreign bond issue; and what reasons are alleged by the Chinese Government for the continuing default in the payment of interest to British bondholders;.
(2) whether he is aware that interest on the British portion of the Tientsin-Pukow railway loan is 10 years in default; that the net earnings of the railway in 1932, 1933, and 1934 have in each of these years been more than sufficient to pay four years' interest on the British portion of the loan; and what has been the result of the representations made by His Majesty's Minister to the Chinese Government;.
(3) whether he is aware that debts contracted by the Tientsin-Pukow railway many years after the issue of the railway's foreign bonds have been paid off, in spite of the fact that the service of the foreign bond issue is seriously in default; and whether he will direct His Majesty's Minister in China to request the Chinese Government to place some definite interest-bearing security under the control of the Chinese customs 324 department for the service of the foreign bond issue of this railway?
§ Sir J. SIMONNo figures of nett revenues have been made public but there seems no reason to doubt that the railway is earning substantial profits. I do not know what are the debts referred to; but if my hon. Friend will supply me with particulars I will institute enquiries. The bondholders are entitled to be paid out of the general revenues of the Chinese Government as well as to a first charge upon the increase in Customs revenues consequent upon the abolition of certain likin taxes. His Majesty's Minister has constantly pressed these claims upon the attention of the Chinese Government, and the reason advanced for not meeting them is that a comprehensive scheme of dealing with railway indebtedness is in preparation. Every suitable opportunity will be taken of reminding the Chinese Government of their obligations in this connection.
§ Mr. MOREINGHas my right hon. Friend's attention been called to the speech of the chairman of the British-Chinese Corporation at the recent annual meeting, in which figures of the increased earnings last year compared with the previous year were set out, and also the complaint of the chairman of the corporation that no payments were being made in respect of accounts established by the Chinese Government some time ago to meet arrears of interest due to the bondholders?
§ Sir J. SIMONI believe that is so.