Papers Relating to the Foreign Relations of the United States, With the Address of the President to Congress December 8, 1914
File No. 493.00/1.
Minister Reinsch to the Secretary of State.
Peking, January 2, 1914.
Sir: In compliance with the request contained therein, I have the honor to transmit herewith a copy of a despatch (No. 456) under date of the 6th ultimo, in which Consul General Greene of Hankow discusses certain aspects of the claims presented by the several nations against the Chinese Government for losses incurred by their respective nationals in consequence of the Revolution of 1911. I also enclose a copy of my reply to the Consul General under date of December 31st, embodying my views upon the points discussed in his despatch. It will be seen that while not concurring with his views that the Chinese Government can be charged with no liability for the damages to foreign interests resulting from that revolution, I have found suggestive and helpful the Consul General’s criticisms of certain recommendations of the Claims Commission which contemplate indemnification for some categories of losses that were only indirectly and remotely consequent upon it.
I have [etc.]
Consul General Greene to Minister Reinsch.
Hankow, December 6, 1913.
Sir: I have the honor to acknowledge the receipt of your instructions No. 16 of November 21, 1913, enclosing a copy of the report28 of the claims commission appointed by the Diplomatic Body, in which are formulated the principles agreed upon for the collection of indemnity from the Chinese Government for losses incurred by foreign firms and individuals during the recent revolution.
From this report it would appear that it has been decided to demand from the Chinese Government indemnity for losses caused to foreigners in the course of, or as a direct result of, warlike operations, irrespective of whether or not the injury is alleged to be due to a willful and unnecessary act or to gross negligence on the part of the Chinese authorities. This is a matter which directly concerns this office, as the bulk of the claims which have been filed here would come under this head, most of the claims being for losses due to the burning of Hankow by the imperial forces during the fighting, and the claim of the Standard Oil Company which originated in this district, being for property destroyed by shell fire in the course of an engagement between hostile forces, one of which occupied a position near the company’s tanks.
While for some reasons it would appear desirable that those persons who, being near the scene of operations, bear the greater part of the loss in times of such national calamities as wars or the disorders attendant upon political revolutions, should be compensated for their losses, and the burden thus distributed [Page 82] among the whole community, two questions arise in my mind: first, whether any such principle has already gained sufficient support in the practice of the nations of the world to be regarded as an accepted principle of international law, and one that would guide the Congress of the United States in considering an appropriation for the payment of a similar claim against our Government; and secondly, if that principle has not been very generally accepted, whether it can justly be enforced upon the Chinese Government.
The use of the expression “warlike operations” in paragraph 3 of class A of the report, would seem to imply a recognition that a state of war did practically exist in certain parts of China during the revolution. There would certainly seem to have been a state of war in and around Hankow during October and November, 1911, when most of the losses for which indemnity is claimed were incurred. There were organized military forces on both sides, which conducted relations with neutral parties, and finally entered into negotiations with each other. Both sides endeavored in general to protect non-combatants and their property, and the Red Cross Society worked on both sides to alleviate the sufferings of the wounded.
Paragraph 1032 of Moore’s Digest of International Law begins with the statement “Claims not usually allowed on account of operations of war.” A claim on behalf of an American citizen for loss of property destroyed by the burning of Moscow in 1812, was peremptorily refused. This case resembles very closely the cases of claims arising out of the burning of Hankow by the Imperial troops at the end of October, 1911. The burning of Hankow would seem to have been necessary as a military measure, in view of the use of the city by the rebels as a base from which to attack the Imperial forces. For several days at the close of October, 1911, there was severe fighting on the outskirts of the city.
The United States refused to compensate the Austrian Government for tobacco belonging to it which was destroyed through the burning of Richmond by the Confederates. (Moore’s International Law Digest, Vol. VI, p. 885, S. 1032.) This case differs slightly from the Hankow claims, in that it was a case of indemnity being demanded from the Government for damage done by insurgents, afterwards suppressed, while at Hankow the damage was done in some cases by the de jure Government of the time, and in others by insurgents who have since become themselves the de jure Government; but in refusing to pay the claim, the United States Government took the broad ground that “It is believed that it is a received principle of public law that the subjects of foreign powers domiciled in a country in a state of war, are not entitled to greater privileges or immunities than the other inhabitants of the insurrectionary district.” Again, on page 886, Count Nesselrode is quoted as writing on behalf of the Russian Government, a propos of a British demand on the Grand Duke of Tuscany for indemnity for the losses of British subjects during the capture of Leghorn, that “according to the rules of public law as they are understood by Russian policy, it can not be admitted that a sovereign, forced to repossess himself of a town occupied by insurgents, is bound to indemnify foreign subjects who may have suffered damage from the assault on such town.” This was almost precisely the situation at Hankow, where most of the damage was done through the attempt of the Imperial Government to reestablish its authority over Hankow and Hanyang. In my despatches sent during the course of the revolution I described in some detail the course of events, and from them I think it will be seen that the contending forces did all that they could have been expected to do to protect foreign property, and that the section of the city where the bulk of the foreign interests were located escaped with almost no injury, the losses being incurred mainly outside the concessions where foreigners have acquired property among the Chinese somewhat against the will of the Chinese Government. On more than one occasion the foreign powers demanded of the Chinese commanders that their operations should be modified in one way or another to lessen the danger to the foreign concessions, and in general these demands were complied with.
From such study as I have been able to make of the practice of the United States heretofore in the case of similar claims, I have received the impression that the United States Government has studiously avoided any admission of liability on its part for similar losses incurred in the United States. Mr. Seward, in addressing the Prussian Minister in 1866, concerning losses suffered by Prussian subjects during our Civil War, stated that “law-abiding neutrals, whether domiciled in the country which becomes a theater of civil war, or residing abroad, have under the law of nations, when not modified by treaty, [Page 83] exactly the same claims for indemnity against the government concerned as citizens of that country have, and no other or greater rights to indemnity” (Moore’s Digest, Vol. VI, p. 958.)
The Russian Government has recently refused to indemnify foreigners for losses caused by mutinous troops and mobs in the disorders attendant upon the political changes of 1905. Very considerable losses were incurred by Americans and other foreigners at Vladivostok, but so far as I am aware no satisfaction whatever has been received, except in the case of the Chinese colony for which a small solatium, utterly out of proportion to their actual losses, was granted in view of the fact that their quarter was specially singled out for attack, whereas the Americans and other foreigners simply suffered with the Russians among whom they were living. As I was in Vladivostok at the time I have personal knowledge of these cases.
I will not multiply quotations on a subject which is doubtless much more familiar to you than to myself. I believe, however, that many of the principles apparently established in the report of the Peking Commission would not be accepted by any of the great nations of the world as binding in international law between themselves. The very secrecy with which they are endeavoring to guard this statement of the cases in which indemnity is to be demanded from the helpless Chinese Government, seems a confession that the policy which it embodies is unjustifiable in international law.
Not only is there no declaration that some fault of the Chinese Government must be shown, but under the heading of “Claims the responsibility for which the Chinese Government cannot disclaim” are included such unusual classes of claims as those for Chinese killed or injured in the performance of their duty to their foreign employers and claims for loss in industrial enterprises such as damage to and deterioration of machinery and materials resulting from suspension or delay in working owing to local revolutionary disturbances. Under “Claims legitimate in principle but not in every case attributable to the revolution” are included expenses in protecting foreign property; loss of personal effects of Chinese employees of foreigners; loss from non-fulfillment or delay in executing contracts of foreign firms and individuals with other private individuals or firms whether foreign or Chinese; travelling expenses of foreigners, not officially employed, to adjacent places of safety; losses of debts and professional fees unrecoverable owing to the death, flight or insolvency of the debtors; losses on account of salaries of foreign employees of foreign firms whose services could not be utilized on account of the revolution; and diminution as a result of pillage in the security given by compradores in foreign firms (without any requirement of proof that such diminution has actually caused loss to the foreign firms). I find myself quite unable to believe that the American Government, or the Russian, German, French or British Governments, would for a moment consider paying claims for such losses incurred within their respective territories; and I am firmly of the opinion that we should not ask China to indemnify our citizens for losses under circumstances which if reproduced in the United States could not reasonably be expected to lead, first, the executive to recommend an indemnity, and, secondly, the Congress to make the necessary appropriation.
There seems something pitifully small in the great nations of the world demanding of China in her present impoverished state that she give out of her poverty what we would never dream of giving out of our easy wealth. But there will be nothing small about the indemnity claims for which such broad principles as those contained in the report of the Peking Commission will open the door.
I believe that it may be said that we can help China more by avoiding such an open break with the other powers as would be caused by refusal to countenance their demands, than by abstaining ourselves from a share in what seems to me extortion. In the first place I do not believe that this is a sound principle. We should do what we consider right and let the others take the responsibility for the course they see fit to adopt for themselves. If we took this attitude in a matter-of-fact manner, without criticism of those powers which differ with us on the ground that we feared to create precedents that might later prove embarrassing to ourselves, I believe our example would carry some weight and might lessen the sum total of unjustifiable claims on the part of other nationalties, though it would hardly induce them under the most favorable circumstances to abandon the stand they have already taken. It is difficult to see how our solidarity with the other powers has served to place any limit upon their demands; for besides the exceedingly liberal basis they have agreed upon [Page 84] for indemnifying firms and individuals and municipal organizations, the several powers have reserved freedom of action on the matter of indemnities to the governments themselves for military and naval expenses. This opens the way for large claims at Hankow as well as in and around Peking. Since January, 1912, the Japanese have maintained at Hankow a military force of some 700 men, who were sent here very shortly after the Japanese admiral had formally and in writing assured the consular body that he and the other foreign naval officers considered that the concessions were already adequately protected. Great Britain and Russia also sent detachments to Hankow, of which the Russian detachment of over 200 men still remains.
Our cooperation with the other powers did not serve to restrain Russia and Great Britain from taking independent action in Mongolia and Thibet, and that action, by depriving China of a large part of her outlying territories available for colonization, brings so much the nearer the day when China will have to go abroad and demand equal treatment in order to secure an outlet for her surplus population and for her adventurous spirits. It is certainly not to our advantage to have the coming of that day hastened.
I therefore earnestly request that the Legation recommend a reconsideration by the Department of the principles to govern the collection of indemnity from the Chinese Government, and that I be furnished with such a statement of the principles to be followed as can be freely shown to all possible claimants, for it would appear that American citizens are entitled to know what kind of claims their Government considers justifiable when the Government itself has actually reached a definite conclusion on the subject. If I were to inform all American citizens who suffered loss on account of the revolution of the conclusions reached by the commission of the Diplomatic Body, it is highly improbable that the substance of the report could be kept secret from the Chinese Government.
If the claims thus far filed by American citizens in this district are disallowed for reasons allied to those submitted in this report, I have the honor to request that I be authorized to refund to the claimants the official fees charged for the authentication of their claims.
I would refer in this connection to my despatches No. 88 of April 20, 1912, No. 166 of October 11, 1912, and No. 200 of January 6, 1913, to the Legation, on this same subject.
I have further the honor to request that the duplicate copy of this despatch be forwarded to the Department of State with such comment and recommendations as you may see fit to add, and that I be informed of the Department’s decision in the matter.
I have [etc.]
Minister Reinsch to Consul General Greene.
Peking, December 31, 1913.
Sir: Your despatch No. 456 of December 6th on the subject of claims for losses during the Revolution of 1911 has been the subject of careful and sympathetic consideration on the part of the Legation. I should point out to you, however, that the purely legal principles upon which you base your argument against the enforcement of claims for damages consequent upon the recent revolution can scarcely be considered apart from the undertakings of responsibility voluntarily assumed by the Chinese Government. That Government has seen fit, with a view to the adjustment of the international complications resulting from the Revolution, to adopt and make applicable to such cases an exceedingly broad and liberal principle of governmental liability. For your information in this regard, I enclose herewith certain extracts from the correspondence of the Legation, recording a number of instances in which such a principle of liability was avowed on behalf of the Government of China, with respect to both the Revolution of 1911–1912 and that of 1913.
It was in an endeavor to construe this general undertaking, and to define its precise applicability, that a commission representing the Diplomatic Body was constituted, and formulated the more detailed principles embodied in the report which is criticized in your dispatch of December 6th. It is perhaps [Page 85] needless to comment that the recommendations of a report so drawn up are not wholly of a judicial character but partake of the character of a presentation of the cases to be urged by the several commissioners in advocacy of the claims presented by their respective nationals; and it is believed that it was rather as a working basis, involving a compromise among the divergent views of the various nations, that the recommendations of this report have received the general approval of the interested Governments. Those recommendations are, however, even yet subject to revision and are in fact to be re-examined at a meeting of the Diplomatic Body to be held in the near future. I may add for your information that there is reason to believe that the tendency of that further consideration of the subject will be towards restricting the grounds upon which claims are to be urged against the Chinese Government. It is hoped that in any case the basis of common action as definitely formulated by the interested powers will not prove to be an inequitable or unduly exigent construction of the commitments made by that Government.
Under such circumstances, it would seem neither fair to our own nationals nor advisable as a matter of policy for the American Government to dissociate itself from the action which is being concerted by the interested Powers with a view to the prosecution of claims which, although perhaps not warranted either by any universally accepted principle of international law or by the practice of our own country, are not in themselves inequitable, especially in view of the acceptance by the Chinese Government of the general principle upon which they are founded.
But while differing from your view as to the applicability of these cases of the general principles of governmental liability for the results of hostilities or other consequences of revolution, the Legation concurs in your opinion that many of the grounds for indemnification specified in the report of the Claims Commission are of such a remote and indirect character as not to come within a fair and equitable construction of the commitments of the Chinese Government. I have therefore telegraphed to the Department of State, suggesting that I be authorized to urge upon the Diplomatic Body the propriety and advisability of giving priority to such claims as are based on the direct and proximate consequences of the Revolution of 1911; and I have received from the Department telegraphic authorization to do so, subject to the proviso that the Legation’s efforts to this end should not commit our Government to the prejudice of such freedom of action as it might deem necessary in the event that other governments should support claims for actual but indirect losses.29
I shall of course notify you of any such changes as may be made in the basis of action hitherto adopted. It is hoped that in the meanwhile you will be able to make known to American claimants the principles that may be expected to be applied to the examination and presentation of their several grounds of complaint, without the necessity of communicating to them the full formulation of principles adopted by the interested Powers as basis of common action in the presentation of the claims arising out of the Revolution of 1911.
In conclusion, I beg to express to you my very hearty appreciation of your conscientious examination and presentation of your views of this matter. It will give me much pleasure to forward your despatch to the Department in accordance with your request, together with a copy of the present communication in comment upon it.
I am [etc.]
Undertakings of the Chinese Government with respect to the payment of revolutionary claims of foreigners.30
revolution of 1911–1912.
Foreign Office to American Minister, February 1, 1913. [Extract—translated from Chinese]: “* ** The Chinese Government agrees to grant just and equitable indemnities for the loss and damage suffered by foreigners during the recent revolution.”
[Page 86]Diplomatic Circular No. 78, April 12th, 1913. Minutes of an interview between the Minister for Foreign Affairs and the British, Italian, German and French Ministers on April 10th, 1913. [Extract]: “* * * Mr. Lu (the Minister for Foreign Affairs) said that the Chinese Government accepted the principle of liability for losses arising out of the Revolution. * * *”
Diplomatic Circular No. 86, April 21st, 1913. Collective note of the Diplomatic Body to the Foreign Office, sent in French. [Extract—translation]: “* * * The Diplomatic Body, in taking this step, acts upon the declaration made by the Wai Chiao Pu to the Ministers named, on April 10th, in which the Chinese Government recognizes its obligation to make indemnification for losses sustained by foreigners as a result of the Revolution. * * *”
Diplomatic Circular No. 122, June 12th, 1913. Foreign Office to the Dean, June 5th, 1913. [Extract—translated from Chinese]: “* * * On the 10th of April last, when H. E. Sir John Jordan called at the Foreign Office and talked over this subject, the Minister for Foreign Affairs declared that the Republican Government having expressed their consent to the principle of compensation for the losses in question* * *” [“losses sustained by foreigners in connection with the Revolution of last year”].
Dean to the Foreign Office, June 27th, 1913. [Extract]: “Par sa note . . . . le Wai Chiao Pu en confirmant les declarations faites par S. E. Mons. Lou Tseng Tsiang, aux Ministres de Grande Bretagne . . . . . . , recomiaissant l’obligation du Gouvernement Chinois de rembourser les pertes subies par les Strangers du fait de la Revolution de 1911–1912 …”
Minutes of the First Session, International Claims Commission. [Extract]: “The Chairman made an address, in which he expressed the willingness of the Chinese Government to indemnify foreigners for losses sustained during the Revolution. * * *”
revolution of 1913.
Presidential Order of July 21st, 1913. [Extract—translated from Chinese]: “2. The Government assumes full responsibility for all damage hereafter sustained by the lives and property of foreigners in such regions, provided that the said damage arises directly from the measures taken by the Government to put down the rebellion. * * *”
Foreign Office to the American Minister (No. 419), dated August 6th, 1913. [Extract—translation from Chinese]: “* * * Chinese Government assumed full responsibility for all damages* * * sustained by* * * foreigners in those regions affected* * * provided said damages arise directly from the measures taken by the Government to put down the revolt. * * *”
Foreign Office to the American Minister (No. 21), dated November 25th, 1913. [Extract—translation from the Chinese]: “* * * As for limitations within which losses will be indemnified, I have the honor to confirm the statement* * * that all losses sustained by foreigners directly arising from the operations of any part of either force will be indemnified. * * *”