Mr. Rockhill to Mr. Hay.
Peking, China, April 26, 1901.
Sir: The British minister called on me this morning and informed me that he was in receipt of instructions from his Government giving its views on the subject of the indemnity. He said that it thought the indemnity should be scaled down to £50,000,000, and that a date should be fixed after which no claims could be made, this to limit the amount of the claims for military occupation, which will be about a million and a half sterling a month. His Government would propose that China negotiate a loan in the open market for a sum sufficient to pay the powers £25,000,000, for which purpose it could give the native customs revenues and the still unalienated foreign customs revenues. As to the time and mode of payment of the remaining £25,000,000, the powers would have to make an agreement with China. Five years might prove to be all the time necessary, for the increased tariff which it is proposed to grant her, and other sources of revenue may be sufficient to enable her to discharge this debt.
The minister was of opinion that the French might be induced to a scaling down, and, from what I wrote you in my No. 74, of the 23d instant, I think it probable some of the powers will view favorably some reduction of their claims. Sir Ernest feared, however, that this [Page 144] plan would be extremely difficult to get Germany to consent to, and lie thought that Italy and Austria might also hold out against it. Belgium, I may add, undoubtedly would; but if Russia and France would accept this proposition, I think it might be carried through.
The minister asked me if I thought the United States would favor such a compromise. I told him I could hold out no hope of it; that in case our proposal was finally declined by the powers, I was instructed to press for a reference of the whole subject to The Hague tribunal.
The British minister feared that such reference, if agreed to, would greatly delay any settlement. It would be impossible to get the evacuation of this province carried out in the meanwhile, and our endeavors to keep down the indemnity might therefore possibly result in saddling on China a large increase of the amount now claimed. He thought his Government wanted to fix the date after which no claim for military occupation could be made at September next at the latest.
I have the honor, etc.,