File No. 498.00/2.
Minister Reinsch to the Secretary of State 31
Peking , January 15, 1914 .
Sir: In view of the slight confusion which has apparently arisen respecting the treatment of American claims now pending against the Chinese Government, I have the honor to submit a brief resume of the character and functions of the several bodies which have had to do with these claims during the past two years, together with a statement of the procedure followed in the presentation of the claims of several sorts. While this may appear supererogatory, yet, in view of the fact that certain claims have been authorized by the Department for presentation to the Chinese Government amongst the 1911–1912 [Page 87] revolutionary claims which do not appear to fall within that category, it is believed that a clear statement of the facts and circumstances relating to the several classes of claims may be of assistance to the Department in reaching a decision as to the class in which any particular claim should be included.
Early in 1913 the Chinese Government made formal announcement of its acceptance of the principle of liability for the losses and damages sustained by foreigners in consequence of the revolution of 1911–1912 and undertook to make just and equitable indemnity therefor. For the exact wording of these undertakings the Department is referred to the abstract which accompanied my despatch No. 57 of January 2, 1914 (Inclosure 3). At the same time it set aside the sum of £2,000,000 to meet the liabilities so assumed. This action inspired the appointment by the Diplomatic Body of a select committee to examine and classify the claims made under the undertaking of the Government, and to adopt a formulation of principles which should ensure uniform action by the several foreign governments concerned. The report of this Committee, forwarded to the Department under cover of the Legation’s despatch No. 814 of April 17th, 1913,32 and approved by the Department in its telegraphic instruction of June 11, 5:00 p.m.,33 variously termed the Report of the Diplomatic Claims Commission “and the “Report of the Claims Committee of the Diplomatic Body,” was adopted by the Diplomatic Body subject to ratification by the several governments concerned. This it duly received, and [it] is therefore binding as between the governments concerned in all matters pertaining to the presentation of claims to the attention of the Chinese Commission appointed to examine the claims arising out of the 1911–1912 Revolution. It should be noted that the Chinese Government was no party to the adoption of this report, that it is not officially cognizant of its existence, and that it is in fact strenuously opposing the payment of certain classes of claims listed in the report as just in principle (class A) as well as all the claims under the headings of B, C, and D.
Shortly after its assumption of liability the Chinese Government announced its intention of appointing a commission to examine and liquidate claims. This proposal met with a ready acceptance by the Governments concerned and the body known as the Chinese Claims Commission was accordingly instituted. It consists of a number of representatives of the Boards of Foreign Affairs and Finance. For convenience in negotiation the Commission has divided itself into committees, which meet the delegates of the several Legations individually. These committees have plenary powers, but meet from time to time as the full Commission to report action taken and to decide on leading cases in order to ensure uniformity of treatment of all claims presented. It should be noted that this commission is in no sense an international body but is purely Chinese, and in its action on claims submitted adheres to principles diametrically opposed to those embodied in the Report of the Claims Committee of the Diplomatic Body. Further, by its constitution it can deal only with claims arising out of the 1911–1912 revolution, although it is probable that it will at a later date, be authorized to deal with claims based on losses sustained by reason of the 1913 Revolt.
[Page 88]Following the appointment of the Chinese Claims Commission, the several foreign governments having claims for presentation designated one or more diplomatic or consular officials to negotiate with that commission respecting the same. These officials are generally termed the Foreign Claims Delegates. They have met from time to time to report action taken, to consult on procedure and to recommend to the Diplomatic Body action which seems necessary in the joint interest of foreign claimants. But it should be borne in mind that these delegates have no powers whatever as a body, partaking rather of the nature of a committee of the Diplomatic Body which can make recommendations but which depends on that body for affirmative action.
There is no international claims commission, nor are there any terms of reference agreed upon by the Chinese and [the] several foreign governments for use by the Chinese Commission and Foreign Delegates in pourparlers. All negotiations with the Chinese Commission are diplomatic in character, not of a judicial or quasi-judicial nature. The lack of terms of reference is the greatest handicap to the expeditious transaction of business, as it causes endless and repeated discussions of the same points by all the delegates. At present the chief points upon which no agreement can be reached are the payment of claims for losses other than those directly occasioned by the military operations of the forces engaged, and the payment of interest from the time of loss until the time of payment on claims allowed.
Both the undertakings of the Chinese Government in respect to losses occasioned by the 1913 revolt and the procedure followed in the presentation and liquidation of claims arising therefrom, differ materially from those respecting the losses caused by the 1911–1912 revolution. An examination of the abstract [Inclosure 3] accompanying my despatch No. 57 of January 2, 1914, will show that in the case of the 1913 revolt the Government specifically limited its liability to losses directly resulting from the military operations of either of the forces engaged, a limitation which it had neglected to make in its undertaking respecting the 1911–1912 revolution. At the request of the Chinese Government, claims for losses alleged to have been occasioned by the 1913 revolt are undergoing a preliminary examination as to the questions of fact at the hands of the foreign consuls and provincial authorities working together. It is understood that these, claims will eventually be referred to Peking for final adjustment.
It should be noted that the Report of the Claims Committee of the Diplomatic Body has no connection with the 1913 claims, nor is it certain that these claims will necessarily be examined by the existing Chinese Commission.
In addition to claims for losses sustained by reason of the 1911–1912 revolution and 1913 revolt, there are now pending a number of American claims Which have little, if any, connection with the late disturbances. They are generally based on contracts to which the Chinese Government or some governmental department or institution is a party. Under the constitution of the Chinese Commission it is not believed that such claims are properly cognizable by it, but should be presented directly to the Foreign Office in the usual manner.
[Page 89]A few examples of a fourth class of claims are also pending: namely, punitive or exemplary damages. The American Government appears to be debarred from presenting claims of this sort to the consideration of the Chinese Commission by the terms of the Report of the Claims Committee of the Diplomatic Body. Moreover, it would seem that the Chinese Claims Commission is hardly competent to assess punitive damages against the Government, its function being rather to restrict the amount of liquidated claims to actual loss proven by the claimants. For these two reasons it is believed that such claims should also be presented directly to the Foreign Office.
The sum of £2,000,000 sterling, set aside for the payment of claims arising out of the 1911–1912 disorders is a part of the proceeds of the Five Power Loan, set aside upon the special insistence on the part of the Diplomatic Body. The Diplomatic Corps and especially the representatives of the Five Powers who furnished the loan are watching over the expenditure of this money with considerable care. It has even been stated in the Diplomatic Meeting that as the Five Powers were furnishing the money no part of it could be used without their consent, that is, that the Chinese Government will not be allowed to pay out any part of this fund except under rules and arrangements agreed to and sanctioned by the Five Powers. Any claims which fall outside of the classes favored by the diplomatic representatives of these powers and sanctioned by them would have to paid out of funds provided by the Chinese Government from other sources.
I have [etc.]
- Receipt acknowledged February 14, 1914.↩
- For. Rel. 1913, p. 204.↩
- Id. 210.↩