Minister Rockhill to the Secretary of State.
Peking, July 15, 1905.
Sir: I have the honor to report that on Sunday, July 2, I accepted in the name of the United States the new Chinese proposals for the settlement of the indemnity stipulated by Article VI of the final protocol of September 7, 1901. The representatives of the other governments concerned signed their assent collectively at the same time, so that the new arrangement, which goes into effect at once, has now taken the place of the original agreement. I signed under the instruction of our Department to accept a solution which met with the unanimous consent of the other powers, and I did this the more readily as the present measure is certainly more equitable and less burdensome to China. The advantages derived from its substitution are, in the first place, that China finding herself compelled to admit that the indemnity is a gold debt is now enabled to cancel the arrears which have accumulated while the question was still open by a payment of 8,000,000 taels, which is 1,412,350 taels less than the lowest estimate made of her indebtedness, on this account, under the former arrangement. In the second place, she is placed in a more advantageous position as regards interest allowed to her on payments in advance, both on interest and amortization, but by far the most important gain to China is in the fact that she is now enabled to make all future payments in gold directly to the governments concerned by means of telegraphic transfers, bought where she chooses in the open market, and thus doing away with the iniquitous system of calculating her payments on the basis of an artificial rate of exchange established arbitrarily by the bankers’ commission.
I inclose copies of my notes to Prince Ch’ing and my colleagues with regard to the acceptance of the Chinese proposals, the terms of which will be forwarded by the next mail.
I also acknowledge receipt of instruction No. 8 of May 31, 1905, with regard to payment by telegraphic transfer, and inclose a copy of my note on this subject.
This change in the provision of the final protocol with regard to the payment of the indemnity has already been communicated officially to the bankers’ commission, and I, too, have sent a notification of it to our delegate.
I have, etc.,