UNOFFICIAL conversations have been taking place since February between the British Ambassador, Sir Robert Craigie, and the Vice-Minister for Foreign Affairs, Mr. Kensuke Horinouchi, regarding the service of foreign obligations secured on the Chinese Maritime Customs revenue and other relevant matters. As a result of this exchange of views the Japanese Government has notified His Majesty's Government in the United Kingdom of the temporary measures which it proposes to take during the period of hostilities to regulate these matters and has received in reply the assurance that the British Government will, for its part, offer no objection to the application of these measures for the period mentioned.
According to these arrangements, which will be subject to reconsideration in the event of a radical change occurring in economic conditions, all revenues collected by the Customs at each port within the areas under Japanese occupation are to be deposited with the Yokohama Specie Bank. From the revenues thus deposited, foreign loan quotas will be remitted to the Inspector General of Customs in order to meet in full the service of the foreign loans and indemnities secured on the Customs revenue. The service of such foreign loans and indemnities will be treated as a first charge on the revenue, after deducting the maintenance expenses of the Customs Administration and certain customary payments and grants. Foreign loan quotas for each port will be determined monthly in proportion to the share of that port in the total gross collections for all ports during the preceding month.
Arrangements will also be made for the payment to the Japanese Government of the arrears on the Japanese portion of the Boxer Indemnity held at the Hongkong and Shanghai Bank since last September, for the meeting of future payments in respect of the Japanese portion of the Boxer Indemnity and the Japanese share of the Reorganization Loan of 1913, for the repayment of the overdraft incurred by the Inspector General since January in relation to the Shanghai share of the foreign loan service which has been
accumulating in the Hongkong and Shanghai Bank at Shanghai, and for the transfer to the Yokohama Specie Bank of the balance of the Customs accounts with the Hongkong and Shanghai Bank in each port under Japanese occupation and the utilization of this balance for the future service of foreign obligations.