The Secretary of State to the Minister in China (Johnson)
47. Your 125, February 7, 11 a.m. Department, after carefully and sympathetically considering question of a further postponement [Page 661] for one year of American Boxer Indemnity payments, is of the opinion that a continuance of the existing arrangement would endanger, and possibly render impossible of attainment, the objectives envisaged by this Government when it modified the original terms governing the American share of the Boxer Indemnity.
In connection with the claim that a further postponement is made necessary by the current curtailment in Chinese Government revenues, Department notes that, according to Soong’s own estimate as contained in his fiscal report covering the period July, 1930, to June, 1932, the combined customs and salt revenues for the calendar year 1932 will materially exceed those of any previous year except 1931.
In connection with the assurance that direct payments for the support of the cultural pursuits concerned would be continued if the Department raises no objection to a further postponement, Department refers to your despatch 1617 of July 7, 1932.42 Department believes that the difficulties experienced by the “China Foundation”, as indicated in your despatch under reference, should be ameliorated rather than augmented. Furthermore it was clearly understood and agreed to by the Chinese Government that last year’s postponement of American Boxer Indemnity payments would not be considered as a precedent.
In any discussions you may have with your British and Italian colleagues in regard to this subject, Department desires that you be guided by the above. Department feels that what may prove a somewhat embarrassing situation could be avoided by convincing the Chinese Government, through Arthur Young, that it would be better policy for it to give up the idea of making request for a further postponement of Indemnity payments.