File No. 493.11/528.
Chargé MacMurray to
the Secretary of State.
[Extract.]
No. 352.]
American Legation,
Peking,
September 3, 1914.
Sir: Supplementing the Legation’s despatch No.
338 of the 17th ultimo26 on the subject of the
anticipated deficiencies in payment of installments of the Boxer
Indemnity, I have the honor to transmit herewith translations of notes
from the Foreign Office, dated August 18 and 21, on this subject, and a
copy of the Legation’s reply of August 22 in pursuance of the
Department’s telegraphic instruction of August 20.* * * I have, in
conversation with the Minister of Finance (Mr. Chou Tzu-ch’i) and with
the Vice Minister for Foreign Affairs (Mr. Ts’ao Ju-lin), supplemented
it by explanations of the Department’s inability to alter the agreed
schedule of payments, as also of its disposition to avoid under present
circumstances any demand for immediate payment, and, if need be, to
undertake
[Page 77]
good offices with a
view to averting such a demand on the part of other powers. Both Mr.
Chou and Mr. Ts’ao, in expressing their appreciation of the attitude of
our Government in this matter, stated to me that the Government is at
present hopeful that the customs revenues may prove adequate to meet the
various charges upon them with only a small shortage. * * * In reply to
an expression of solicitude as to the ability of the Chinese Government
to carry out its present program of education, the Vice Minister for
Foreign Affairs assured me that neither the maintenance of the Tsing Hua
College nor the support of indemnity students in the United States would
in any case be allowed to suffer from the present financial difficulties
of the Government.
Mr. Ts’ao also raised the question as to the method which would be
followed by the United States, in the event of a shortage in the
indemnity payments, in refunding a portion of the indemnity—whether the
United States would retain, out of any deficient installment, the whole
of the amount scheduled to be retained under the agreement of 1908, or
whether it would retain only an amount thereof proportionate to the
total sum offered by the Chinese Government in payment of the
installment due. I replied that I should have to refer this inquiry to
the Department for decision should the case arise.
I have [etc.]
[Inclosure 1.]
The Minister for Foreign
Affairs to Chargé MacMurray.
Ministry of Foreign Affairs,
Peking,
August 18, 1914.
Sir: I have the honor to inform you that I
have received the following communication from the Ministry of
Finance:
Since the close of the year 1911 the receipts of each office
of the Maritime Customs have been deposited by the
Commissioner of Customs in the Hongkong and Shanghai Banking
Corporation, the Deutsch-Asiatische Bank, and the
Russo-Chinese Bank of Shanghai to meet the old debts due the
different countries by China, and the remainder together
with the receipts of the Native Customs under the control of
the Inspector General of Customs has been allocated to the
payment of the 1900 indemnity. Now as a result of the
European war trade is at a standstill, China is gravely
affected, and the customs receipts will unquestionably show
a deficit. Moreover the price of gold has unexpectedly risen
so that we estimate that the receipts of the customs will
fail to meet the indemnity payments.
We propose to act according to the arrangement agreed upon in
the year 1911, but with certain temporary modifications. The
customs receipts of every month will be used as before to
meet the old obligations and the balance, if any, will be
deposited in the several banks. If the amount is
insufficient to meet the indemnity payments they must remain
temporarily unpaid. After the conclusion of the European
war, measures will be taken to settle the account. You are
requested to communicate with the Ministers of the different
countries, asking that this favor may be extended in view of
the difficulties of China.
I would observe that the monthly payments due from the Central
Government have been provided for out of the customs receipts. Now
that trade is at a standstill because of the European war there will
be a deficit in the customs receipts and China will greatly suffer
from the consequences in the coming year. The proposition of the
Ministry of Finance to act according to the arrangement made in 1911
in making payments but to wait the conclusion of the European war to
make up deficiencies in the amount seems an unavoidable necessity. I
hope that the Governments of the different countries will be lenient
and friendly and be willing to assist in this emergency of China. I
ask you, the American Charge d’Affaires, to telegraph to your
Government asking its assent to our proposal. For this we shall be
deeply grateful. With compliments.
[Seal of the Ministry of Foreign
Affairs.]
[Page 78]
[Inclosure 2.]
The Minister for Foreign
Affairs to Chargé MacMurray.
Ministry of Foreign Affairs,
Peking,
August 21, 1914.
Sir: On the. 18th instant this Ministry
had the honor to address a note to the Legation in reference to the
postponement of the payment of the balance of the Indemnity. Ever
since the revolution, Chinese finances have shown a deficit. Great
efforts have been made of late to reduce them to order and some
measure of success was being attained when, unfortunately, the
European war suddenly commenced, and Chinese finances were the first
to suffer from its effects. The Ministry of Finance therefore
proposed that the payment of the balance of the indemnity be
temporarily postponed. This is an unavoidable necessity, which it is
expected your Government will approve.
The Chinese Government, however, regards the matter as one of most
pressing importance to the finances of the country and as requiring
immediate decision in order that serious difficulties may be
avoided. If it is necessary to wait until the American Legation has
received instructions from its Government it is greatly to be feared
that much time will be lost. I therefore have the honor to express
the hope that, having regard for considerations of international
friendship and for the difficult situation in which China is placed,
the American Legation will grant its consent to the measure
proposed. With compliments.
[Seal of the Ministry of Foreign
Affairs.]
[Inclosure 3.]
Chargé MacMurray
to the Minister for Foreign
Affairs.
American Legation,
Peking,
August 22, 1914.
Excellency: I have the honor to
acknowledge the receipt of your excellency’s two notes of the 18th
and 21st instant with reference to the postponement of the payments
of the installments soon falling due on the 1900 indemnities. On
receipt of the note of the 18th instant I telegraphed to my
Government asking for instructions, and have now received a reply to
the following effect:
The American Government has no present intention of insisting on the
immediate payment in full of the installments of the 1900 indemnity
as they fall due. It expresses the hope, however, that the temporary
difficulties of the Chinese Government may not be so great as to
interfere with the carrying out of the educational program
contemplated by the arrangement under which the returned indemnity
funds were to be used to prepare students and send them to the
United States for education.
I avail [etc.]
