2. When circumstances necessitate the merchant making a
foreign loan, he should first make a report to the Ministry
stating its use and the source from which he can derive money
for its repayment.
1 Cf. infra, p. 128.
' The Hanyihping Co., i. e., Hanyang Steel Works, Taiyih Iron Mines
and the Pinghsiang Colliery, had arranged a loan of Yen 15,000,000
with Japanese financiers. Sheng Hsuan-huai, who fled to Japan when
the first revolution broke out, was accused of negotiating for the dis-
posal of his shares to the Japanese. Thus a storm of protest arose.
The Government was dragged in and asked to take over the enterprise.
^ Far Eastern Review, ^larch, 1914, p. 395.
353] NATIONALIZATION' OF RAILWAYS 125

3. Merchants who have been allowed by the Ministry to
make foreign loans should submit the agreement for such
loans to the Ministry for its approval. No agreement should
be considered as valid if it is signed before the Ministry ap-
proves it.
4. Before the signing of an agreement, the merchant should
first inform the Ministry, which will send a delegate to witness
the signing, and no loan agreements shall be considered as valid
unless they have been subjected to the above processes.
The Government has also issued a lengthy statement ^
dealing with its different schemes for financial relief, its
policy towards military administration, industrial develop-
ment, etc. In addition, its policy towards the means of
communication was finally set forth as follows :

We will be careful regarding State enterprises. The Gov-
ernment will only undertake such projects as must be man-
aged by the State, while other business enterprises will be left
to the people. The Government will not compete with them,
but it will guide and encourage them . ..
