Mr. Rockhill to Mr. Hay.

No. 74.]

Sir: The diplomatic corps held a meeting to-day, at my request, to consider the proposition of the United States concerning the indemnity to be asked of China, which I had made known to it in my memoranda of March 29 and April 11, copies of which I had the honor to transmit to you in my dispatches Nos. 52 and 59.

I outlined the considerations which I thought imposed the solution of this question, as suggested by you, as the only just, reasonable, and politic one which could be found. The powers had declared that the disorders in June of last year could not serve as a pretext for the acquirement of territory or any other special ad vantages, consequently the indemnity could only be paid in money. The terms of the Joint Note of December 24 last stated that the indemnity should be “equitable,” in other words just and reasonable, by which we understood that it should not exceed the power of China to pay without creating for it grave financial embarrassments, prejudicial to the administration of the country, administrative reform, and to all foreign interests, and which might compel it to have recourse to financial expedients, which all the powers must condemn, imperiling the independence and integrity of the Empire.

Since the indemnity to be asked of China must therefore be reasonable, it mattered little to us whether its annual revenue were eighty or a hundred or more millions of taels. We were bound to only ask that which China was in a position to pay us of our losses and expenses, and it was not for us to seek to ascertain what was the full extent of China’s resources so as to exact the last cent of it of her. The Government of the United States thought that the limit of China’s ability to pay, under the conditions specified, was £40,000,000 sterling.

The payment of this sum would cost China over £50,000,000, but it was our belief that she could pay it; but any additional demand would expose foreign interests to the gravest danger. I referred to our declared policy here, by which we sought, among other things, to prevent the recurrence of antiforeign troubles, and said that we must therefore try to prevent as much as possible the imposition of new taxes upon the Chinese people for the payment of indemnities, for [Page 142]by so doing their hostility would be intensified and perpetuated, and that we should ultimately lose much more than the few millions which we now sought to secure.

The Russian minister stated that he had communicated your proposal to his Government, but had received no reply. In principle his Government was willing to accept what China was able to pay. That so far as that went he accepted our proposition, and thought that undoubtedly the resources of China should be taken into consideration in assessing the amount of the indemnity. As to the figure fixed by you, £40,000,000, he thought it was premature to discuss it until the commission charged by the diplomatic body to study the resources of China had made its report on the subject. He inquired how this limit had been reached by my Government. I replied that the data on which all estimates of the revenue of China were based were well known to everybody; they were practically the pamphlets on the subject by Mr. Jamieson, to which might be added the memoranda recently submitted by Sir Robert Hart; that no accurate data beyond these were accessible to anyone, unless I was very much mistaken on the subject. These data clearly indicated that the borrowing capacity of China barely reached £40,000,000 sterling with her present available revenues. This statement of mine was, however, controverted by the French minister, who said that he thought China could pay much more and still retain sufficient revenue for the administration of the country. He deferred expressing his opinion on our proposition until the long-promised report of the commission above referred to is submitted.

The Japanese minister, while thinking that any discussion of our proposal and the fixing of any limit to the sum to be demanded was premature, believed that the powers might have to consider a reduction of the indemnity; that while common principles had been accepted by most of the powers for assessing private claims, no such principles, so far as he knew, had been applied to assessing war expenses. He thought it might be necessary that something be done in this direction.

The British minister, though not ready to state the limit of the indemnity to be fixed, said that in the belief of his Government this sum should not exceed a reasonable amount, payment of which would not create financial embarrassment to China.

The German minister stated that he had no instructions from his Government on our proposition, but he thought that if the commission charged with studying the revenue ascertained that China could pay the full amount of the expenses of the powers she should be made to do so, and that he saw no reason why the latter should show excessive generosity in the matter.

The Belgian minister thought that if a reduction in the indemnity should be decided upon, it should only bear on the governmental claims; that the private claims should not suffer thereby.

On the whole, I gained the opinion that the representatives realized that the total amount of the claims may ultimately have to be subjected to a certain scaling down, although most of them hold that the limit fixed by you is entirely too low.

Owing to the disinclination to discuss the subject before the submission of the report of the commission on finance, and in view of several of my colleagues being still without any instructions from their governments on the subject, I did not press the matter to-day, but informed them that I reserved it for discussion later on.

[Page 143]

The Italian minister then informed the diplomatic corps that the war claim of his Government, up to the 1st of May, is 70,000,000 francs; for each month after this date it will be 2,500,000 francs. If the claim is not paid by the 1st of July, it will ask 200,000 francs per month as interest. If the occupation lasts until the autumn, a special item of 4,000,000 francs will be asked. His Government also claims 2,000,000 francs for the destruction of its legation here and the property therein. The private claims to be presented by him amount to 5,635,844 taels. This sum is subject to reduction.

The Russian minister informed his colleagues that the state expenses of Russia, known up to the present time, including the destruction of its railroad, amount to 170,000,000 rubles; that the military expenses per month, after the 15th of March, were 2,000,000 rubles. As to private claims he was unable to fix their amount, but it would be between 6,000,000 and 8,000,000 rubles, in all probability.

In a previous meeting I asked the diplomatic corps to agree to restore to the Chinese the Tsungli Yamen, when it was agreed that the archives should be turned over to them, but the building, being in the occupation of the German military forces, could not at present be restored to them.

The Chinese plenipotentiaries having asked me to renew their request that the buildings as well as the archives be restored to them, I did so to-day, and meeting with the support of my colleagues, the German minister agreed to ask his military authorities to comply with this request, which I think will be done within a few days.

After discussion on a number of other subjects of minor importance, among others a reply to Count Waldersee’s letter of April 6, the diplomatic corps adjourned without indicating the date of its next meeting.

I am, etc.,

W. W. Rockhill.