Mr. Rockhill to Mr. Hay.
Peking, China, August 9, 1901.
Sir: The Final Protocol embodying the results of the negotiations was to have been submitted on the 6th instant to the conference by the committee charged with drafting it, but the British minister the evening before the meeting sent word that he could not attend the meeting and asked that it be deferred to a later date. No reasons were given for asking the postponement.
The day before yesterday Sir Ernest Satow called on me and told me he had asked that the meeting be deferred because he was without instructions from his government, to whom he had telegraphed the text of the Protocol (before its acceptance by the drafting committee, I may remark). He had now received the expected instructions. His government objected to a number of passages in the draft. It wanted the insertion in Article VI, paragraph c, of a clause to the effect that “no conversion, redemption, or cancellation of the bonds shall take place otherwise than by action of sinking fund, which shall be neither increased nor diminished without the consent of the powers.”
The British Government also objected to the international committee for the conversion of ad valorem duties into specific, claiming that, the tariff in force at present being the British one, the most-favored-nation clause will protect all interests, and that it could not admit of its tariff being converted by an international board. These are the principal objections.
The first clause which Great Britain wishes to have introduced was originally suggested by the Japanese Government, but, in view of the strong opposition which developed against it, the matter was wisely dropped. The clause read, when suggested by Japan:
No conversion, redemption, or cancellation of the bonds shall take place otherwise than by action of sinking fund, and, as long as any portion of the bonds remains unpaid, China shall not grant to any power any separate or exclusive territorial or financial advantages.
As I did not believe that this provision could accomplish the object it had in view, I have never supported it, and have held that it would undoubtedly offend some of the powers, who would categorically refuse to accept it. The Russian minister has since stated that he would not agree to it, and several of the other representatives hold the same views.
The refusal of the British Government to agree to the international commission for the conversion of the tariff is wholly inexplicable, for the commission was unanimously accepted by the conference on June 11, when it was proposed by the Japanese minister as a condition for his acceptance of my proposal to convert the import duties into specific ones. The Chinese Government was duly informed on July 27 (see my No. 144, of that date) that this commission was one of the conditions asked for in return for the powers agreeing to a 5 per cent effective import duty.
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I have the honor, etc.,