CHINA. 



119 



from 5,500,000 to 15,000,000 taels. The Russian 

 minister estimated that the native customs would 

 give 3,000,000 taels, and that there was an avail- 

 able balance of 3,500,000 taels in the existing cus- 

 toms revenue, which could be increased by 2,500,- 

 000 taels if the import duties were raised to an 

 effective 5-per-cent.; if they were raised further 

 to 10 per cent, there would be an additional 10,- 

 000,000 taels, giving a total of 19,000,000 taels to 

 provide for the service of a loan of 70,000,000 

 at 4 per cent., being 800,000 taels more than 

 would be required. 



The ministers notified China on May 7 that 

 the joint indemnity would be 450,000,000 taels, 

 and asked by what methods she proposed to pay 

 it. The Chinese Government promptly agreed to 

 pay the sum demanded, proposing to meet a loan 

 for that amount, conjointly guaranteed by the 

 powers, at 4 per cent, interest, extinguishable in 

 fifty years, by paying 20,000,000 taels annually, of 

 which 10,000,000 taels would be raised by a salt 

 tax, 3,000,000 taels from native customs, and 

 2,000,000 taels from the likin ; if need should arise 

 the Manchu pension fund would be appropriated. 

 Great Britain and the United States opposed a 

 joint guarantee, while Russia and the other 

 powers insisted on this and Russia on an increase 

 of customs duties to 10 per cent. The United 

 States Government proposed to submit the whole 

 question of indemnities to the arbitration of The 

 Hague tribunal, but found no support for this 

 solution. The deadlock lasted nearly two months, 

 and was broken at last by a compromise. As 

 finally decided, the amount of the total indem- 

 nity was not changed from 450,000,000 taels, equal 

 to $337,000,000. Each creditor power was to re- 

 ceive the amount of its claim in Chinese bonds 

 bearing 4 per cent, interest from July 1, 1901, 

 to be extinguished in 1940 by a sinking-fund, 

 the first payment to be made in 1904. Pay- 

 ments are to be made in gold at the rate of ex- 

 change existing on April 1, 1901. The fiscal re- 

 sources assigned to the payment of the bonds are 

 the salt gabel, the native customs levied in non- 

 treaty ports, and the maritime customs imposed 

 in treaty ports on foreign goods, the duties being 

 raised to an actual 5-per-cent. ad valorem payable 

 in silver, excepting the portions of the maritime 

 customs and of the salt gabel that are already 

 pledged for the payment of other debts. The free 

 list is abolished except in the case of cereals. If 

 the duty of 5 per cent, prove inadequate, the 

 powers will be at liberty to increase it up to 10 

 per cent. The proposal to pay off the bonds by 

 1940, instead of 1950, as suggested by the min- 

 isters, came from the Chinese Government, which 

 must make a considerable financial sacrifice to 

 become rid of the debt sooner. The annual bur- 

 den of the national debt is maintained to the last 

 at about 42,000,000 taels, whereas the scheme fa- 

 vored by the ministers would steadily reduce the 

 burden after a few years. The interest and sink- 

 ing-fund of the indemnity loan amount to 23,000,- 

 000 taels per annum. Revenues now assigned to 

 other debts will, when those debts are extin- 

 guished, be applied to the indemnity, the principal 

 and interest of which will require first and last 

 the payment of 1,000,000,000 taels. In accordance 

 with one of the demands of the powers the Tsung- 

 li-Yamen was abolished and a Board of Foreign 

 Affairs (in Chinese, Wai-Wu-Pu) instituted in its 

 place, presided over by an imperial prince and 

 containing two ministers and two assistants. 

 Wang-Wen-Shao and Chu-Hung-Chi were ap- 

 pointed ministers and Hsi-Hu-Peng and Lien-Fang 

 assistants. The Wai-Wu-Pu shall have prece- 

 dence over all other boards, and the ministers 



shall have direct access to tho Emperor. Foreign 

 ministers when admitted to audi. !!<< will be con- 

 veyed in imperial chairs to the p!il;i<- through the 

 central gates, and will be received in the, halls 

 where the Emperor is accustomed to entertain 

 imperial princes. 



The ministers proposed improvements in Peiho 

 river and a channel for ocean steamers in Shang- 

 hai river, and the Chinese representatives ac- 

 cepted this proposition. The consideration of 

 conditions to facilitate commerce and inland navi- 

 gation, which were under negotiation before the 

 Boxer troubles began and formed one of the lead- 

 ing demands in the note of the powers, was by 

 mutual consent left to be the subject of future 

 negotiations in connection with the increase of 

 foreign customs to 10 per cent, and the concomi- 

 tant abolition of the likin. It was agreed that 

 the new 5-per-cent. tariff, including goods here- 

 tofore exempt from duty, should come into force 

 on Oct. 1, 1901, but that goods already in transit 

 at the date of the signature of the protocol should 

 be admitted at the old rates of duty. The average 

 prices of merchandise from 1897 to 1899 were 

 taken as the basis of valuation for the new specific 

 duties, for it was decided that the duties should 

 be specific and not ad valorem, so as to prevent 

 frauds. A commission was appointed to conduct 

 commercial negotiations with China, as provided 

 in the protocol, its task being to revise the treaties 

 of commerce and arrange for the opening of new 

 ports to trade. Delay was caused after the ques- 

 tion of the indemnity had been settled by the op- 

 position of Great Britain to the negotiations being 

 conducted by an international commission in 

 which Italy, Spain, Austria, and the Netherlands 

 would be represented, their trading interests in 

 China being insignificant, while England has 

 three-fourths of the total Chinese trade. The Brit- 

 ish proposal was that each power should nego- 

 tiate a tariff separately, the advantages of which 

 would be secured to the others by a most-favored- 

 nation clause. With the object of preventing the 

 isolated action of any of the powers in connection 

 with the reopening of the Manchurian question or 

 otherwise, the British Government proposed to 

 exact a covenant from China that she would not 

 convert or redeem the indemnity debt, but would 

 pay it in strict accordance with the scheme of 

 amortization extinguishing the debt in 1940. As 

 the British amendments were inacceptable they 

 were withdrawn. 



The demand contained in the joint note for the 

 perpetual interdiction of imports of arms and war 

 material into China, and also of the materials 

 for their manufacture, was opposed by the United 

 States and Japan from the beginning as depriv- 

 ing China of an essential element of independence. 

 The Chinese plenipotentiaries pointed out that 

 the Chinese Government would not be able to 

 preserve the internal peace and order for which it 

 was held responsible if prevented from maintain- 

 ing an armed force. It was finally decided to for- 

 bid the importation of arms for two years, the 

 prohibition to be extended, if found necessary, for 

 further successive periods of two years. The Chi- 

 nese meanwhile had been importing munitions of 

 war in large quantities, and in their own arsenals 

 were turning out magazine rifles and smokeless 

 powder. When the edict was issued forbidding 

 imports of munitions of war for two years it 

 was directed to private merchants, and did not 

 apply, as the ministers had intended it should, to 

 eithej' the imperial or the provincial governments. 

 The edict ordering the punishment of provincial 

 officials was equally nugatory, and some of the 

 persons whom the ministers had proscribed were 



