Mr. Rockhill to Mr. Hay.
Peking, China, July 18, 1901.
Sir: At the meeting of the diplomatic corps to-day the question of the indemnity was brought up. It had been put on the order of the day by me to ascertain whether some progress could not be made, and the deadlock brought about by the refusal of the British Government to accept the proposal made by Russia concerning the eventual raising of the tariff to 10 per cent broken. The Russian minister stated that it seemed to him highly desirable that the diplomatic corps should be informed whether the vote taken on the 11th of June on the subject, which$ like all other votes, was taken subject to the approval of the various Governments, had been accepted or refused by them. A vote was taken, which resulted in all the representatives accepting the Russian proposal, the Belgian minister alone stating that his Government accepted the eventual increase of the tariff to 10 per cent, [Page 276] but that it had not referred in its instructions to him as to the ultimate use of the additional revenue thus derived.
I stated, as instructed by you, that the United States had no opposition to make to the Russian proposal.
The British minister said that the modification introduced by him in the original proposal of the Russian Government, by which all Governments were to have the right to make such reservations as they thought proper before negotiations concerning the increase of the tariff should commence (see my No. 114, of June 11, 1901), and which he had at the time accepted, had not met with the approval of his Government. Great Britain, Sir Ernest Satow said, was more interested in trade in China than any other nation, and it could not accept more than the 5 per cent effective tariff, except in consideration for certain commercial advantages, especially the abolition of likin. This eventual increase should, in the opinion of the British Government, be more in the nature of a surtax, revocable in case the Chinese Government did not carry out the concessions which it would have to make to secure said increase, especially as regarded likin, but, being revocable, it could not possibly be used as additional guaranty as proposed by Russia.
The British Government thought the desire of Russia would be fully met if it was agreed that in case the revenues pledged for the payment of the interest on the new debt proved insufficient, the powers, at the proper time, should inquire what measures might be necessary to supply said deficit.
The Russian minister stated that his Government had no idea of blocking commerce, in the advancement of which it took the liveliest interest, when it asked, as an additional guaranty, for the eventual raising of the import duties beyond 5 per cent. The interests of commerce and a stable guaranty could both be insured. The credit of all the powers was not the same; some had to show to the bankers through whom they would eventually have to float China’s bonds that their risks were even less than they might suppose. The additional guaranty which it was sought to obtain would not absorb all the revenue derived from the increased tariff, possibly only a very small proportion of it, especially as it was not sought to replace by it the revenue derived from the salt gabelle; the balance of the increased tariff could be used to secure desired commercial concessions. The necessity of the case would determine the amount to be applied to the payment of interest, and it was even possible that none of it might ever be so required, as he fully concurred with the British minister and his other colleagues in the belief that the Chinese would strenously endeavor to meet on time, and in full, all their financial obligations, as they had always done in the past.
The German minister thanked the Russian minister for the views he had expressed on commercial reforms. It was because he entertained similar ones that he had originally accepted the Russian proposal.
I stated that I had only accepted the Russian proposal on account of the amendment introduced in it by the British minister, by which all of our commercial rights were protected; that I could not have agreed to any proposal detrimental to American commercial interests, or lose any of the powerful leverage which a concession of an increase of the tariff on imports gave us with the Chinese Government.
After these various declarations on our part the subject was dropped, but it is my belief that the declared intention of the various powers [Page 277] to abide by their former acceptance of the Russian proposal may be a formal indication to the British Government that some compromise on its part with Russia is imperatively demanded, and I trust the deadlock occasioned by this disagreement may soon be broken.
The British minister then proposed that a vote be taken as to whether all the powers were willing to fix finally the sum of 450,000,000 taels, which had until now been considered only as an approximate one, as the amount of the indemnity to be paid by China.
The Russian minister remarked that it was important to finally settle the exact amount of the private claims, and if the sum total fell short of 450,000,000, the balance should be given back to China. If the diplomatic corps was ready to accept unconditionally 450,000,000 taels, he was also.
The Japanese minister, who had formerly stated that his Government could not accept as a satisfactory settlement 4 per cent interest, declared that as the British minister’s proposition was acceptable to all his colleagues, he, too, would accept it unconditionally, subject to the approval of his Government.
The Austrian and Belgian ministers accepted it on the same conditions as the Japanese. There can be no doubt that they will receive the approval of their respective Governments within a day or two.
A plan of amortization recently submitted to the diplomatic corps and considered by that body as better than those previously examined, was also accepted, and has been approved by the Chinese Government. * * * *
It was furthermore decided that a final protocol embodying all the results of the past negotiations should be drawn up and signed by the foreign representatives and the Chinese plenipotentiaries. This can be done, it is believed, as soon as the Anglo-Russian difficulty no longer blocks the way.
An answer was agreed upon to be sent to the Chinese plenipotentiaries accepting the proposal made by them in a recent letter as to the place in the palace to which the foreign representatives should be carried in sedan chairs at Imperial audiences. This finally closes the question. I will transmit copies of the correspondence in a special dispatch.
The conference then took up the question of the draft convention and regulations prepared by a subcommittee, composed of the German, British, and French ministers, and myself, for the organization of a conservancy board for the Whangpu River. The draft was accepted, with some slight modifications, and will be transmitted to the various Governments for approval, on receipt of which it will be discussed with and I have no doubt accepted by the Chinese Government. Within a day or two I will send you copies of these documents with such explanations as they may require.
An answer to a recent Chinese note concerning the places in which examinations are to be suspended, and the question of the suspension of the metropolitan examinations, was then agreed upon. I will transmit copies of this correspondence in a separate dispatch.
As indicated to you in several of my previous dispatches, the Russian Government has shown much interest in the article of the Joint Note which provides for the maintenance of the prohibition of the importation of arms and ammunition into China. The Russian minister to-day brought up the subject again. He said his Government was much interested in it, and asked if the scheme submitted to the [Page 278] conference had received the approval of the various Governments. It appears that none have accepted it.
The Japanese and British ministers and I have repeatedly stated that, as to the period during which we thought any prohibition should be enforced, our Governments were in favor of the shortest possible; and the Japanese minister having proposed two years, my British colleague and I have expressed the preference of our respective Governments for that term.
The Russian Government would like to see it, as I have previously informed you, enforced for a period of at least five years. Although I doubt the practicability of the scheme, some attention has to be paid to it in view of the insistence of the Russian Government.
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I am, etc.,