1913 - 5% Reorganisation Gold Loan The Reorganisation Gold Loan of 1913 was for the capital sum of £25,000,000. The Loan was, "...authorized by Presidential Order of 22nd April 1913 officially communicated by the Wai Chiao Pu to the Ministers in Peking of Great Britain, Germany, France, Russia and Japan." The newly appointed President of the Republic of China, Yuan Shih Kai, initially approached Britain, France, Germany and United States of America seeking a substantial loan to assist the fledgling government of the Republic of China. Later this group was expanded to include Japan and Russia, but eventually the United States of America withdrew from participation, leaving five countries which agreed to assist the Chinese Government with financial aid. The principal financial institutions which participated in the loan arrangements were the Hongkong & Shanghai Banking Corporation, Deutsch-Asiatiche Bank, Banque de I'Indo-Chine and Russian Asiatic Bank. The Yokohama Specie Bank participated on behalf of Japan, but did not issue separate bonds, countersigned by the bank. Arrangements were made as to convertibility into Japanese Yen of the bearer bonds issued by the other four issuing banks. The banks all received 6% commission allocated to each bank together with bonds issued are detailed in the data tables below: Hongkong & Shanghai Banking Corporation £7,416,680 Deutsch-Asiatiche Bank £6,000,000 Banque de I'Indo-Chine £7,416,660 Russian Asiatic Bank £2,777,780 Russian Asiatic Bank (Belgium) £1,388,880 It should be noted that the original Russian issue bonds which were brown coloured, were subsequently withdrawn and exchanged for a series of green coloured bonds. The original brown coloured bonds, sometimes referred to as "Yellow Bonds" were annulled. In consequence there may still be bonds in existence of two different colours from the Russian issue carrying identical serial numbers. The purpose of the loan was to enable the new government of the Republic of China to meet financial liabilities inherited from the previous organization of government institutions and to meet the administrative costs. The loan was secured upon the entire revenues of the Salt Administration of China. In some ways this was a rather dubious security for such a large-scale loan as the entire Salt Gabelle (Salt Tax) had already been committed for other purposes with any surplus being pledged as a security against the Crisp Loan of 1912. However there was a further provision that foreigners would assist in the reorganisation of the collection of Salt Tax revenues and if the loan was at any time in default, the Salt Tax revenues were to be administered by the Maritime Customs Administration which was primarily under the control of foreigners. Coupons were payable on 1st January and 1st July each year. The loan has been in default since 1939. As an interesting footnote to this loan, Mr. M.E. Weatherall, who was a senior official of the Chinese Maritime customs Service in 1921 was quoted in the publication "Wayfoong" as making the following observation; "I believe that I am correct in saying that the greater part, if not all, of the reorganisation loan of 1913 was accounted for by statements and vouchers, but that in actual fact very little of it was ever applied to the purposes for which it was lent. It disappeared mysteriously and nobody knows where it has gone."