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China shall adopt financial measures acceptable to the powers for the purpose of guaranteeing the payment of said indemnities and the interest and amortization of the loans.
An international commission on indemnities was appointed to lay down the principles upon which private claims should be dealt with. They submitted their report to the diplomatic corps and it was approved ad referendum. The Department of State (instruction to Peking No. 515, May 3, 1902) expressed its judgment that the rules thus laid down would be found suggestive and instructive. They were not, however, agreed to by all the powers, and were not, therefore, binding internationally.
In the instruction referred to above the Department also remarked that all merely speculative or imaginary claims or elements of damages were to be excluded from consideration.
Item C of this report (see Senate Document No. 67, 57th Cong., 1st sess., p. 106) records the manner in which it was deemed proper that private claims should be dealt with. It says:
MERCHANTS. — Private property of merchants.
Real estate destroyed or damaged, including temporary housing and repairs, expert surveys for determining amount of damages, etc.
Usual and inevitable salary of employees whose services could not be turned to account.
Unavoidable office expenses not made good in consequence of the events.
Stock in trade, goods, provisions, samples possessing pecuniary value, destroyed or deteriorated.
Extraordinary cost of storage and reshipment.
Broken contracts of all descriptions, losses suffered in consequence of the non. execution of contracts entered into for articles of exportation or importation.
Deposits of money in telegraph offices or in banks. Advances to Chinese merchants who have become insolvent in consequence of the events.
Extraordinary cost of insurance rendered necessary by the events referred to. Goods requisitioned for foreign troops for defensive works.
When the two American commissioners were appointed to investigate and determine American claims, they were given the following instructions, from which it will be seen that the rule quoted above was adopted on behalf of the United States to govern the action of its commissioners (Mr. Conger to Mr. Bainbridge, No. 1135, March 14, 1902):
In compliance with instruction No. 435, dated January 14, 1902, of the Depart. ment of State, I hereby designate you and Consul J. W. Ragsdale, of Tientsin, as commissioners to investigate and determine what amount should be allowed on each and all of the claims of citizens of the United States against the Chinese Government, growing out of the so-called Boxer uprising of 1900; and also on the claims of Chinese who, during the same events, suffered in person or property in consequence of their being in the service of citizens of the United States.
This commission will meet first in Peking, and proceed thence to such other localities as the exigencies of careful and intelligent examination demand.
Reasonable notice of the sittings of the commission in the several localities should be given to the claimants in advance.
The commission will be governed by the rules and practices usually required in proving and allowing claims of citizens of the United States under like circumstances; together with the regulations prepared by the committee on indemnities and approved by the representatives of the powers in Peking on March 13, 1901.
The commissioners will make a report on each claim, reciting the evidence of citizenship and of the fact and amount of loss or damage upon which the claim is based.
Their recommendations will be submitted for revision to the United States minister in China, and the whole will be subject to the final revision and approval of the Department of State.
The following is quoted from the final report of the American commissioners, addressed to the minister at Peking and dated November 17, 1902:
Indemnity claims have been filed by American merchants for goods destroyed, for losses through breach of contracts, through the death, disappearance, or insolvency of Chinese debtors, through the general interruption of business, depreciation in value of stock, and for extraordinary cost of storage and insur
Interest has been claimed on capital employed in carrying stock rendered idle in consequence of the disturbances.
The commission has allowed as compensation for goods destroyed their actual value at the time of destruction. It has recognized rights vested by existing contracts and allowed compensation for the actual injury sustained through broken contracts due to the events, including expense of carrying undelivered merchandise, counting interest as part of such expense. But the commission has disallowed contractual claims where the contracts have been ascertained to be capable of fulfillment through the continued solvency of parties. Claims for losses through the general interruption of business have not been allowed; nor has interest been allowed on capital invested in goods for sale in open market not contracted for in delivery. Losses resulting from debts recognized as valid but no longer recoverable because of the death, disappearance, or bankruptcy of Chinese debtors due to the uprising have been compensated. Extraordinary cost of storage and insurance has been allowed.
The above will perhaps make clear the object for which the Boxer indemnity was asked and received and the general manner in which, in so far as private claims are concerned, it has been devoted to that object.
The various steps in the negotiations relating to the indemnity were as follows:
December 22, 1900.
The foreign representatives sent in a joint note consisting of twelve articles setting forth certain demands.
Article VI stated that China should pay equitable indemnities for states, companies or societies, private individuals and certain Chinese, ctc.
December 30, 1900.
The foreign representatives received a reply to their note of the 22d, embodying an imperial decree dated the 27th, accepting all of the twelve articles.
January 7, 1901.
Foreign representatives formulated their twelve articles into a protocol and submitted this to the Chinese plenipotentiaries for signature.
January 16, 1901.
Each foreign minister received from the Chinese plenipotentiaries a copy of the aforesaid protocol duly signed and sealed, and also a copy of the imperial decree accepting all of the demands. May 7, 1901.
The foreign ministers submitted statement to China showing their losses to be 450,000,000 taels. This joint note was not a demand for the above-named amount, but was sent to the Chinese plenipotentiaries to enable them to give formal expression as to the limits of China's ability to pay and the means she proposed taking. May 11, 1901.
Reply of Chinese plenipotentiaries re indemnity of 450,000,000 taels, proposing monthly method of payment of above amount for thirty years, but begging that total be reduced. May 28, 1901.
A list of the indemnities asked by the foreign powers until the 1st of July and prepared by the committee on the payment of indemnities was
circulated by the dean of the diplomatic corps among his colleagues. The amount given as representing the total claim of the United States was $25,000,000, or 34,072,500 taels. In the opinion of the committee, as stated in the dean's note, the total indemnity would not, when adjusted, exceed 450,000,000 taels. May 30, 1901.
A note from Chinese plenipotentiaries to dean of diplomatic corps accepting 450,000,000 taels. May 30, 1901.
A note from Chinese plenipotentiaries to dean of diplomatic corps accepting 450,000,000 taels, with interest at 4 per cent., for the indemnity embodying an imperial edict dated the 29th of May covering the above amount.
September 7, 1901.
Final protocol signed by plenipotentiaries of all the powers in which it is agreed that the indemnity should be paid in thirty-nine annual installments, with interest at rate of 4 per cent per annum.
Article 6 (b). The service of the debt was to take place in Shanghai as follows:
" Each power shall be represented by a delegate on a commission of bankers authorized to receive the amount which shall be paid it by the Chinese authorities designated for that purpose, to divide it among the interested parties, and to give a receipt of the same.”
Article 6 (c). “The Chinese Government shall deliver to the dean of the diplomatic corps a bond for the lump sum, which shall subsequently be converted into fractional bonds bearing the signature of the delegates of the Chinese Government designated for that purpose. This operation and all those relating to issuing of the bonds shall be performed by the above-mentioned commission, in accordance with the instructions which the powers shall send their delegates."
John K. Moir, of the International Banking Corporation in Shanghai, was chosen the delegate of the United States on the commission of bankers at Shanghai.
October 13, 1901.
The bond for the lump sum of 450,000,000 taels was delivered by the Chinese plenipotentiaries to the dean of the diplomatic corps, in compliance with paragraph (c) of Article VI of the final protocol.
June 14, 1902.
At a meeting of the representatives of the powers held in Peking on the 14th of June an agreement was signed declaring a definite apportionment of the indemnity and accepting on behalf of their governments such apportionment.
The United States took 32,939,055 taels, or $24,440,778.81 gold, with interest at 4 per cent per annum from July 1, 1901. May 18, 1904.
The original fractional bond was signed by the commissioners of the Chinese Government and the commissioners of the United States Government, and was subsequently filed in the Department of State under cover of a letter from the International Banking Corporation of the above date.
July 2, 1905.
A new method of calculating payments and interest was presented in the form of a collective note by the representatives of the powers and subsequently agreed to by China.
December 15, 1906.
New bond based on collective note of July 2, 1905, signed and subsequently forwarded to the Department of State. January 11, 1907.
Chinese Government was notified that henceforth the United States' share of the payments under the indemnity is to be paid direct to the United States Treasurer instead of through the International Banking Corporation of Shanghai.
The bond with the International Banking Corporation has since been canceled, owing to the above arrangement.
Following is a summary of the successive steps taken in the settlement of claims of American companies, societies, and individuals, and certain Chinese, for losses and damages growing out of the disturbances of 1900; schedule of the claims paid, etc.: September 2, 1901.
Minister Conger transmitted to the Department copy of a letter addressed to him by certain American citizens having claims against the Chinese Government, requesting information as to the status of their claims and the procedure to be adopted in establishing them.