Foreign Relations of the United States, 1901, Appendix, Affairs in China, Report of William W. Rockhill, Late Commissioner to China, with Accompanying Documents

Mr. Rockhill to Mr. Hay.

No. 86.]

Commissioner of the United States to China,
Peking, China, May 16, 1901.

Sir: I have the honor to confirm as follows my telegram to you of the 12th inst:

Twelfth. Chinese reply to note referred to in my telegram of 7th has been received. It proposes annual payments 15,000,000 taels, of which 10 from the gabelle, 3 from the native customs, and 2 from the likin. Maritime customs to see that monthly payments are regularly made into authorized banks which would transmit proportion to each power. Payments to commence July, 1902. Refers to extreme financial embarrassments which must result. Begs powers to reduce amount and to agree to increase by one-third the present tariff.

A copy of the full text of the reply of the Chinese plenipotentiaries, as above referred to, and a translation thereof, are herewith inclosed.

I am, sir, your obedient servant,

W. W. Rockhill.

[Translation.—Original written in French.]

Reply of the Chinese plenipotentiaries to the note sent them on the 16th instant by the foreign Representatives, asking the means China proposed taking to pay the indemnities to be asked.

[Received by M. de Cologan May 11, 1901.]

(After acknowledging the receipt of the communication of the representatives of the powers, the Chinese plenipotentiaries continue as follows:)

The principle of indemnity having been decided upon and consented to by Clause VI of the convention can only be admitted without discussion. Nevertheless, we can not refrain from remarking that the enormous figure of 450,000,000 taels indicated in the communication of the representatives of the powers exceeds all our previsions.

The annual revenue of China does not exceed 88,000,000 taels, a sum barely sufficient to defray public expenses. But in recent years, through unforeseen events, new obligations have been added to the ordinary expenses in the shape of loans, the sinking funds and the interest on which amount to more than 20,000,000 taels annually, and consequently at the present time the revenues of the State no longer suffice for its expenses. These latter being furthermore increased by the enormous figure of the indemnity, the representatives of the powers will understand without trouble the nature of the new difficulties and our embarrassment.

If we had to undertake to find in new sources of revenue the means of providing for these increasing obligations, the carrying out of the measures to be taken to attain that end would require considerable time and would entail delays the length of which it is impossible for us to foresee.

All that we can do for the present is to find among the already known sources of revenue, however insufficient they may be, portions which willingly or unwillingly can be diverted to guarantee the payment of the indemnity, reserving to determine, on the other hand, the means necessary to supply the domestic deficit which will result therefrom.

After careful deliberation, we propose for the time being to take from the revenues of the gabelle an annual sum of 10,000,000 taels, from those of the native customs 3,000,000 taels, and from those of the likins 2,000,000 taels, in all 15,000,000 taels, a sum which can always be completed if necessary by means of an additional levy from the 10,000,000 taels of the metropolitan chest. There would thus be an annual fixed sum of 15,000,000 taels reserved and specially devoted to the payment of the indemnity, and the Imperial Maritime Customs would be intrusted with taking the necessary measures for insuring its regularity. Beginning with the twenty-eighth year of Kuang-hsü (July, 1902), the customs would make monthly payments of 1,250,000 taels into the formally authorized banks, and out of these funds the banks would transmit to each one of the interested powers the proportional part allotted to it by the committee of the powers. In this way within a term of thirty years this whole debt of 450,000,000 taels would be paid off.

Nevertheless, although China thinks it possible for her to provide for these new obligations, the financial difficulties which would result are such that we hope the representatives of the powers will feel that there is ground for reducing the enormous figure indicated in their communication, and that with the object of preventing in some degree the deficit produced by taking these funds from the Chinese treasury they will consent that one-third above the present tariff be hereafter levied on all customs payments. Their excellencies would thereby show to China the sentiment of justice which animates them and their desire to maintain a cordial understanding.

Such are the broad lines of the mode of procedure which we deem as a commencement we should submit to the examination of the representatives of the powers in reply to their communication, and we beg them to do us the honor to give us their opinion, so that we may be in a position to enter without delay into details of the steps which still remain to be taken by both parties to reach a satisfactory settlement of this question of indemnity.