Minister Rockhill to the Secretary of State.

No. 134.]

Sir: I have the honor to inclose herewith translation of a note addressed on the 19th instant by the Waiwu Pu to the dean of the diplomatic corps. It relates to a divergence of opinion as to the amount of indemnity paid during the first six months of this year. This results from the adoption of different rates by the commission of bankers on the one hand and the Shanghai taot’ai, through whom the payments are made, on the other in calculating the value in gold of the amounts paid in silver. This difference amounts to £27,000, which the Chinese Government now proposes to split with the powers interested. The Chinese Government also asks that it be allowed on any surplus found due to it on this last half-yearly account interest at 4 per cent.

A meeting of the representatives of the powers interested was recently called to consider the proposal of the Waiwu Pu. Under the general instructions given me on the matter by the Department, I agreed to the Chinese proposals as equitable and just. The other ministers also agreed, subject to the instructions of their governments. The Russian chargé d’affaires, however, raised objections in view of his government having informed China previously that it would take its share of the indemnity in silver. He agreed finally to submit the proposals to his government, but I fear this small matter may drag for some time.

I have, etc.,

W. W. Rockhill.
[Page 158]

Na-T’ung to Baron von Mumm.

Twenty-first of the ninth moon of the thirty-first year Kuanghsü (October 19, 1905).

I have already expressed to your excellency my sincere thanks for your helpful assistance in settling the indemnity question. But there remains a last point on which I am desirous that your excellency should, before your departure, lend me your assistance, so that this matter shall offer no further difficulty. This unsettled point relates to the conversion into gold, at the rate of June 30, of the sums paid in silver during the first six months of the current year, and to the difference between the rate of gold fixed by the banks and that which had been ascertained by the Shanghai taot’ai.

In an interview which your excellency had on this subject with the Waiwu Pu on the 20th of the month before last, you said that the sterling rate ascertained by the Shanghai taot’ai of 2 shillings 7.8125 pence for the tael, was inexact, and that the rate for telegraphic transfers on the 30th of June was, in reality, 2 shillings 7.75 pence; that the difference according to the rate was, not £30,000, but only £27,000; that in your opinion this difference of £27,000 could be borne half by the powers and half by China, but that you had not yet reached any agreement with your colleagues on this point.

As a considerable length of time has elapsed since this interview, I presume you have reached a conclusion, and if the foreign ministers all agree to the division by halves, I shall not insist, on my side, on my views. Therefore, in view of the difference between the gold coins of the various powers, and that sterling coin can not be uniformly used for all, I would be obliged if your excellency would have drawn up, at a rate calculated for the coin of each country, a list of the sums of which each power would relinquish a half, and to send it to me for examination and consideration.

On the other hand, as regards the payment of the indemnity, there are yearly two terms; the one at the end of June includes only interest and is the smallest; the other, at the end of December, includes the sinking fund and interest and is the largest. The Chinese method of payment consists in calculating the lump sum for sinking fund and interest for the whole year and dividing that whole into twelve equal fractions which are paid monthly. It results, therefore, that, if on the 30th of June the amount of the sums paid during the first half year is added up, a surplus will always be found. This surplus is nothing else than the anticipated payments on which, according to the new arrangement, China is to be allowed 4 per cent interest.

Now then, when an agreement has been reached on the rate, if, after each power had made its calculations, a surplus is found to exist, it will be proper to request the bankers of the interested powers to allow on this surplus interest at 4 per cent from the 30th of June to December 31.

I shall be obliged if your excellency would reach an understanding as soon as possible with your colleagues and inform me of the result.

(Compliments and cards.)