File No. 493.11/379.
The American Chargé
d’Affaires to the Secretary of
State.
[Extract]
No. 814.]
American Legation,
Peking
,
April 17, 1913
.
Sir: Referring to the Department’s instruction
No. 290, of October 4, 1912, requesting the Legation to report what
action, if any, had been [Page 205] taken
by the commission appointed by the Diplomatic Body to classify the
claims of foreign residents of China arising out of the revolution and
to make recommendations in regard to them, I have the honor to send
enclosed a copy of the commission’s report, which was presented to the
Diplomatic Body at its meeting held April 7th. The diplomatic
representatives, after some slight amendments, adopted the report and
decided to recommend its approval by their Governments.
Mr. Calhoun was chairman of the commission mentioned, and the report was
practically completed before he left. Upon his departure, at the request
of the commission, I accepted a place thereon, but there was only one
meeting held thereafter: that for the final reading and adoption of the
report.
* * * The principle of liability was admitted by the first Premier of the
Republic, Tong Shao-yi, in his address at Nanking on March 29th, 1912
[before the so-called National Assembly, at Nanking] . Practical
recognition of the liability was also given by the settlement of certain
claims of French citizens in the Province of Yunnan. These, however,
were probably settled by the provincial authorities. A general admission
of the principle of liability was made also by the Minister of Finance
in his letter-of February 1, 1913, to the six Ministers. * * *
But to dispel all doubt in regard to the matter a committee consisting of
the Ministers of Great Britain, France, Germany and Italy was appointed
by the Diplomatic Body on April 7th to call upon the Minister of Foreign
Affairs and discuss the subject with him.* * * As will appear from the
report of the committee, enclosed, the Ministers mentioned called upon
the Minister of Foreign Affairs on April 10th and stated that they had
been appointed to discuss with him the question of foreign claims
arising out of the revolution and to propose that the Foreign Office
should appoint representatives to meet representatives of the different
Legations to go into the claims and agree upon the amounts due.
The report of the committee came up for consideration at the next meeting
of the Diplomatic Body, April 16th. It was decided to agree to the
proposal of the Minister of Foreign Affairs that representatives of the
Ministries of Finance and the Interior, if so desired, should take part
in the joint examination of claims and to propose that the meetings be
held at the Foreign Office three days each week. It was further agreed
that the order in which the Legations should present their claims should
be determined after the Chinese Government should have appointed its
representatives. * * *
The Diplomatic Body further agreed that the head of each Mission, in
transmitting to his Government the report of the commission on
classification of claims, should point out the desirability of approving
the report without amendment, if possible, in order to secure uniformity
in the treatment of claims by the several Powers and prevent delay in
their consideration. Amendment by one or more Powers may lead to further
prolonged discussion and consequent loss of time.
It was decided to be advisable, furthermore, to call attention to the
statement made in the second paragraph of the report on classification
of claims to the effect that the commission did not consider [Page 206] it within their province to
express an opinion on the subject of indemnities to foreign governments
for military and naval expenses, and to suggest that the foreign offices
of the Powers concerned should consult together and agree upon a uniform
policy in regard to such expenses. I have the honor, in reporting this
suggestion to the Department, to express the hope that the impoverished
Government of China will not be compelled to bear the heavy burden of
compensation for such expenditures, and that the Department may be
disposed to use its good offices to induce the other Powers concerned to
accord the young Republic of China a generous treatment in this regard.
* * *
In transmitting this report, I have the honor to request that if it shall
meet with the approval of the Department, I may be instructed by cable
to that effect so that the Legation may at once proceed to classify
American claims accordingly and formally present to the Chinese
Government those that fall within the categories A and B.
I have [etc.]
[Inclosure 1.]
Diplomatic Circular No. 58.
Peking
,
March 14, 1913
.
The Dean has the honour to circulate a report which he has received
from the Commission appointed by the Diplomatic Body to investigate
the question of foreign claims arising out of the Revolution and
would suggest that it should form the subject of examination at a
meeting of the Heads of Missions.
report of the claims commission.
The Commission entrusted by the Diplomatic Body with the examination
of the principles relating to foreign claims arising out of the
revolution have in the first instance examined each case
communicated to them by the various legations. They then grouped the
claims according to their general character and subdivided them in
convenient categories. The object of the Commission in so doing was
to furnish the Diplomatic Body with a common basis for estimating
the acceptability of the claims which have been or will be submitted
by those interested to their respective Legations.
The Commission did not consider it was within their province to
express an opinion on the subject of indemnities to foreign
Governments for military and naval expenses as the decision whether
or not to present such claims rests, in the view of the Commission,
with the Governments themselves.
It will be seen then that the Commission have divided the claims into
four general classes. Class A covers those which, in their opinion,
must be regarded as arising directly and immediately out of the
Revolution, and the responsibility for which the Chinese Government
cannot disclaim. Class B embraces claims which, while legitimate in
principle, are probably not in every case attributable to the
Revolution and are therefore open to discussion. Class C covers
claims for losses in respect of which the Commission do not consider
that an indemnity can fairly be demanded from the Chinese
Government. Class D includes claims which the Commission do not
consider can properly be classed among the Revolutionary claims.
The accompanying minutes of the meetings will be found to illustrate
the views of the Commission on the several questions which arose in
the course of discussion and the Commission confine themselves here
to drawing attention to the following points in particular:
In the case of merchandise destroyed or looted, it is understood that
the owner ought to be entitled to compensation equal to the market
value of the goods prevailing at the time of loss, or in the case of
export goods, to the contract price.
[Page 207]
In determining the rates at which compensation should be paid for
death or injury the Commission have the honour to suggest that the
principles adopted by the Crown Advocate of His Britannic Majesty’s
Government in adjudicating the Boxer claims might be followed. An
extract from Mr. Wilkinson’s report is enclosed for the convenience
of the Diplomatic Body.
In the case of damages caused to foreigners by the destruction,
deterioration or loss of property held by them as security, it
should be understood that the indemnity payable on that account
cannot exceed the amount of the debt for which such security was
given.
It should be explained that in the use of the words “Chinese
Government” or “Chinese authorities,” the Commission have drawn no
distinction between the Imperial and the Revolutionary or Republican
authorities.
The Commission recommend that interest payable on claims admitted
should not exceed five per cent. on personal claims or seven per
cent. on commercial claims from the date of loss to the date of
payment.
class a.
Indemnities to Municipalities:
- 1.
- Destruction and loss, as the direct result of the
Revolution, of movable and immovable property belonging to
foreign municipalities.
- 2.
- Expenses for protection and self-defense, including loss
caused by the deterioration and [sic] unused provisions
recognized as of a municipal character.
Indemnities to Societies, Firms and Individuals:
- 3.
- Destruction and loss of movable and immovable property,
including goods, personal effects, money and documents of
commercial value belonging to foreign societies, firms and
individuals, whether in the capital, a treaty port, or in
the interior: (a) in the course of or as a direct result of
warlike operations, or by the act of looting soldiers or
other undisciplined troops; or (b) by the act of robbers or
pirates or as a result of acts of an anarchical
character.
- 4.
- Goods under transit pass imported or destined for export,
the property of foreign merchants, looted or destroyed by
Chinese soldiers and robbers in the interior.
- 5.
- Loss sustained owing to appropriation by Chinese
authorities of sampans, wharfs, pontoons, hulks, launches,
pontoon bridges, railway material, ammunition and other
explosives and any other kind of goods belonging to
foreigners.
- 6.
- Compensation for: (a) foreigners who lost their lives or
were injured physically and incapacitated as a result of the
Revolution; and (b) Chinese in foreign employment similarly
affected in the performance of their duty to their foreign
employers.
- 7.
- Salaries and other payments due under contract to
foreigners in Chinese Government service or institutions
unpaid owing to the Revolution.
- 8.
- Actual loss for non-fulfillment or delay in execution,
owing to the Revolution and through no fault of the foreign
claimants, of contracts and other engagements entered into
by foreign firms and individuals with the Chinese
authorities; such loss includes freight, reshipment,
storage, insurance, and loss or deterioration of
goods.
- 9.
- Traveling expenses of foreigners in Chinese official or
semi-official service to an adjacent place of safety and
return journey. Extra living expenses during absence, and
rent of houses.
- 10.
- Deposits of money or investments in Chinese Government
Banks or other Government Departments, not recovered.
- 11.
- Actual loss in industrial enterprises such as damage to
and deterioration of machinery and materials, resulting from
unavoidable suspension or delay in working owing to local
Revolutionary disturbances.
- 12.
- Rents not recoverable and rents paid in advance where
occupation and use were actually prevented by military
operations or the acts of Chinese soldiers.
- 13.
- Damages caused to foreigners by the destruction,
deterioration or loss of property held by them as
security.
class b.
Indemnities to Societies, Firms and Individuals:
- 1.
- Expenses incurred in protecting movable and immovable
property belonging to foreign societies, firms and
individuals in the capital, in a treaty port or in the
interior.
- 2.
- Fees and expenses incurred in determining the amount of
damage sustained, of whatever nature.
- 3.
- Loss of personal effects, including money, of Chinese
employees of foreign firms and individuals.
- 4.
- Demurrage caused by the detention of ships or prohibition
of voyage: (a) under orders of the Chinese authorities; (b)
as a measure of precaution or necessity taken by the foreign
consuls or others in authority.
- 5.
- Actual loss for non-fulfillment or delay in execution,
owing to the Revolution and through no fault of the foreign
claimants, of contracts and other engagements entered into
by foreign firms and individuals with: (a) other foreign
firms and individuals; (b) Chinese firms and individuals.
Such loss includes freight, reshipment, storage, insurance
and loss or deterioration of goods. Also forfeits actually
paid.
- 6.
- Traveling expenses of foreigners (not in Chinese official
or semi-official service) to adjacent places of safety, but
not the expense of the return journey.
- 7.
- Debts and professional fees recognized as valid, which can
no longer be recovered, owing to the death, flight or
insolvency of Chinese debtors or clients traceable to the
Revolution.
- 8.
- Usual salaries of foreign employees of foreign firms whose
services could not be turned to account.
- 9.
- Diminution as the result of pillage in the value of
guaranties given by compradores to foreign firms.
class c.
Indemnities to Municipalities:
- 1.
- Diminution of municipal income caused by the
Revolution.
- 2.
- Rents of houses paid in advance where occupation was
prevented.
- 3.
- Salaries and wages of employees whose services could not
be turned to account owing to the Revolution.
Indemnities to Societies, Firms and Individuals:
- 4.
- Telegrams and such like charges necessitated by the
abnormal state of affairs.
- 5.
- Prospective profits not realized owing to the
nonfulfillment or delay in the execution of contracts and
other engagements entered into by foreign firms and
individuals with: (a) the Chinese authorities; (b) other
foreign firms and individuals; (c) Chinese firms and
individuals.
- 6.
- Extra living expenses incurred by foreigners owing to
enforced absence from the usual place of residence, e. g.
rent of houses and temporary accommodation of business. All
similar expenses incurred in respect of Chinese servants and
employees.
- 7.
- Expenses of removing property of whatever kind to a place
of safety and replacing it.
- 8.
- Expenses incurred for reduction of staff. Extra wages for
foreign and Chinese employees.
- 9.
- Freight, insurance and storage of stock-in-trade which
could not be realized or suffered depreciation and expenses
through congestion of stock.
- 10.
- Interest on capital which could not be utilized owing to
the troubles.
- 11.
- Loss of prospective profit owing to partial or wholesale
deterioration of stock-in-trade.
- 12.
- Loss owing to fluctuation of exchange, appreciation or
depreciation of market prices and appreciation of freight
and transport.
- 13.
- Additional wages necessitated by the rise in the price of
labor.
class d.
- 1.
- Claims for principal and interest on provincial loans
unpaid.
- 2.
- Loss owing to inconvertibility or depreciation of Chinese
Government and provincial bills and paper money attributed to
the Revolution.
- 3.
- Claims in respect to alleged illegal and unwarranted
imposition of taxes during the disturbances.
(signed)
C. Sforza
E. T. Williams
Robert Everts
K. Midzuno
E. S. Scott
Boris Pelekhine
G. Riedesel
J. Borel
Peking
,
March 13, 1913
.
[Page 209]
[Inclosure 2]
Extract from Mr. Wilkinson’s Report.
Claims for compensation for the death of relatives fall naturally
into two classes: Claims on behalf of the children of murdered
parents and those by other relatives for loss of support, total or
partial, actual or reasonably prospective, rendered or undertaken by
those killed.
Death claims on behalf of children were dealt with as follows: The
children’s ages and the station of life of the parents being
ascertained, a sum equivalent to the present value of an annuity at
three per cent of whatever sum was necessary and fitting for the
education of each child for the number of years to elapse before
attaining the age of twenty-one was calculated and allowed. In
addition to this, such sum was allowed as would, invested at
compound interest at three per cent, for the same number of years,
provide for each child at twenty-one a necessary and fitting sum for
his advancement in life.
In dealing with death claims on behalf of relatives, the age of the
beneficiary was ascertained and also the actual or average annual
sum received from the deceased. The average expectation of life of a
person of the claimant’s age being taken, a sum equal to the present
value of an annuity for such number of years at three per cent of
such annual sum was awarded. In case of prospective benefit to have
been received if the murdered person had lived, the sum promised or
reasonably expected to be paid by the deceased was taken as a basis
of calculation.
In case of partial disablement I adopted, where practicable, the
following method of assessment: I obtained evidence as to the extent
to which the life of the claimant was, from an insurance point of
view, damaged; that is to say, the amount of extra premium which an
insurance office would demand on the claimant, if otherwise sound,
applying for a policy on his life, the extent of which they would
“load” the policy. The principal sum on which my calculation was
based being that in which the claimant would naturally, from his
position in life, take out a policy if about to marry, I then
allowed the capitalized value of these extra premia as compensation
for the injury received.
[Inclosure 3.]
Diplomatic Circular No. 78.
Peking
,
April 12, 1913
.
The Dean has the honour to circulate herewith the procès-verbal of
the interview which the Italian, German and French Ministers and
himself had with Mr. Lu on the 10th instant respecting the foreign
claims arising out of the revolution.
The Dean has the honour to suggest that this question should be
further discussed at a meeting of the Diplomatic Body and he begs to
invite his Honourable Colleagues to come to the British Legation for
the purpose on Wednesday, the 16th instant, at 3.00 p.m.
procès-verbal.
The Ministers of Great Britain, Italy, Germany and France called on
Mr. Lu—with whom was Mr. Wang—at 4.30 p.m. on Thursday, April 10,
1913.
The Ministers informed Mr. Lu that they had been deputed by the
Diplomatic Body to discuss with him the question of foreign claims
arising out of the Revolution. The Diplomatic Body had appointed a
Commission to examine the principles relating to these claims and
this Commission had now completed its task of classifying the claims
communicated by the various Legations in accordance with the
principles agreed upon. The report of the Commission having been
presented to the Diplomatic Body, the latter now desired to propose
to Mr. Lu that the Wai Chiao Pu should appoint representatives to
meet representatives of the different Legations to go into the
claims and agree upon the amounts due with a view to future
payment.
Mr. Lu said that the Chinese Government accepted the principle of
liability for losses arising out of the Revolution and he welcomed
the proposal of the [Page 210]
Diplomatic Body; he presumed that the latter would arrange the order
in which the claims of the different Legations should be dealt
with.
The Ministers replied that they would report Mr. Lu’s answer to the
Diplomatic Body who would then make further suggestions as to the
procedure to be followed.
Mr. Lu added that he would inform the Cabinet of the result of this
interview the following day and as it was possible that other
Ministries—such as the Ministry of Finance and the Ministry of the
Interior—might desire to be represented at the joint examination of
claims, he would be glad to learn how a request for such
representation would be viewed by the Diplomatic Body.
The Ministers replied that, speaking for themselves, they had no
objection to the proposal, which would probably tend to facilitate
matters; they would lay the matter before the Diplomatic Body and
would communicate further with Mr. Lu on this and the other points
raised at an early date.
Mr. Lu suggested that the place of the proposed conference should
also be considered at the same time and concluded by expressing his
desire to do all in his power to promote an early and satisfactory
solution of the whole question.
(Signed)
J. N. Joedan
C. Sforza
Haxthausen
A. R. Conty
The Ministry of Foreign
Affairs to the Six
Ministers.
Ministry of Foreign Affairs,
Peking
,
February 1, 1913
.
Your Excellencies: With reference to the
reorganization loan at present under negotiation, there are certain
points which require elucidation. On January 9th I received your
excellencies’ joint memorandum on the subject and after consultation
with the Minister of Finance I have decided on the following
arrangement in two articles:
(1) The Chinese Government agrees to grant just and equitable
indemnities for the loss and damage suffered by foreigners during
the recent revolution.
To this end the Chinese Government will set aside a sum of two
million pounds sterling out of the proceeds of the present loan of
£25,000,000 for the purpose of meeting the indemnities above
referred to.
(2) The admissibility of the claims and the amount of the indemnities
to be paid shall be jointly determined by the Legations and the
Chinese Government. In case of disagreement, recourse shall be had
to arbitration.
* * * * * *
The above two articles being of a satisfactory nature, the
arrangement therein contained can be adopted, and I have the honor
to inform Your Excellencies accordingly.
With compliments,
Ministry of Foreign Affairs.