676 FRANK H.H.KING The diversion of native customs revenues traditionally designed for assignment to provincial governments disorganized provincial finances and was arguably an important factor in the disintegration of central rule.23 This at a time when China,under pressure from the Powers,was nominally developing a central government designed for authoritative rule over the provinces.Ad hoc borrowing by provincial authorities tends to confirm this judgement.Furthermore,if all agreed that Chinese revenue were limited,it follows that the indemnity would cause Peking to seek any temporary accommodation possible.One notorious method was consequent on the decision by leading European Powers to remove from the China consortium'its monopoly role in industrial lending.Consequently,loans could be negotiated by the Chinese with any group willing to be involved,provided they were for an industrial purpose,for example,a railway or a port.Such a loan would include a provision for cash up-front;the cash was accordingly paid over,the project itself never undertaken.Such negotiations were conducted with groups which were outside the Consortium and opposed to the Consortium under any terms.The apparent 'success'of such groups led to a general political questioning of the Consortium and pressure to open up all Chinese attempts to secure additional financing.The Consortium may have had preservation of China's credit-worthiness in mind,but China did not appreciate such patronizing,seen always against absolute standards of sovereignty,and anyway the need for funds,increased by the burden of the Indemnity, was paramount. Unravelling:Modifications and Redefining to 1932 Interruptions and moratoriums Having weathered the first decade of Indemnity payments,China now faced the problems arising from the 1911 Revolution,which had disrupted payments to the extent of some f2 million,a sum which was included in the so-called Reorganization Loan of 1913.Indeed as noted earlier,the provision of short-term funds in a long-term loan had become a dangerous pattern,designed in part to circumvent 2 As argued by Hans van de Ven,Military and Financial Reform in the Late Qing and Early Republic',in Lin Man-hoang,ed,Finance and Modern History (Taipei:Institute of Modern History,Academia Sinica,1999),17-105.676 FRANK H. H. KING The diversion of native customs revenues traditionally designed for assignment to provincial governments disorganized provincial finances and was arguably an important factor in the disintegration of central rule.23 This at a time when China, under pressure from the Powers, was nominally developing a central government designed for authoritative rule over the provinces. Ad hoc borrowing by provincial authorities tends to confirm this judgement. Furthermore, if all agreed that Chinese revenue were limited, it follows that the indemnity would cause Peking to seek any temporary accommodation possible. One notorious method was consequent on the decision by leading European Powers to remove from the ‘China consortium’ its monopoly role in industrial lending. Consequently, loans could be negotiated by the Chinese with any group willing to be involved, provided they were for an industrial purpose, for example, a railway or a port. Such a loan would include a provision for cash up-front; the cash was accordingly paid over, the project itself never undertaken. Such negotiations were conducted with groups which were outside the Consortium and opposed to the Consortium under any terms. The apparent ‘success’ of such groups led to a general political questioning of the Consortium and pressure to open up all Chinese attempts to secure additional financing. The Consortium may have had preservation of China’s credit-worthiness in mind, but China did not appreciate such patronizing, seen always against absolute standards of sovereignty, and anyway the need for funds, increased by the burden of the Indemnity, was paramount. Unravelling: Modifications and Redefining to 1932 Interruptions and moratoriums Having weathered the first decade of Indemnity payments, China now faced the problems arising from the 1911 Revolution, which had disrupted payments to the extent of some £2 million, a sum which was included in the so-called Reorganization Loan of 1913. Indeed as noted earlier, the provision of short-term funds in a long-term loan had become a dangerous pattern, designed in part to circumvent 23 As argued by Hans van de Ven, ‘Military and Financial Reform in the Late Qing and Early Republic’, in Lin Man-hoang, ed, Finance and Modern History(Taipei: Institute of Modern History, Academia Sinica, 1999), 17–105