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revenues collected. Under this arrangement the inspector general collected the revenues and deposited them in the Hongkong & Shanghai Banking Corporation, the Deutsch-Asiatische Bank, and the Russo-Asiatic Bank, at Shanghai.

At the time, it was thought that, by reason of the disturbed conditions through which the country was then passing, the customs receipts would fall off; and a contingency might arise wherein they rould not be sufficient to take care of the maturing payments of the prior loans; and the three banks aforesaid were made depositaries for the customs receipts by common consent, because they were interested in the service of the loans as well as in the indemnity. No official report of the customs receipts for the year 1912 has yet been made. but it is unofficially reported that the increase over last year amounts to some Hk. Tls. 3,500,000.

The three banks aforesaid paid the loan obligations for the year 1912, as they matured, out of the receipts of that year, and on December 31st had on hand a surplus of some $10,273,682.09. These banks continued to hold this surplus, on deposit, in practically equal amounts, which gave them a marked advantage in the local financial market. This fact excited some unrest on the part of the other banks wbich are interested in the service of the indemnity, but are not interested in the prior loans. These banks claimed that the continued deposit of the surplus in the three depositary banks gave the latter a predominance in the local financial market to which they were not entitled. Therefore the dissenting banks complained to their respective Ministers and asked that the surplus be divided among and deposited with the indemnity banks, so-called, including the three depositary banks, in proportion to the respective national interests therein.

The French, Japanese and Belgian Ministers especially were active in supporting this demand of their banks, and at their suggestion a meeting of the Diplomatic Body was convened on January 16th to consider the question. * * *

The discussion continued through three several protracted meetings and, for a time, it seemed impossible to reach an agreement. Finally it was agreed to distribute the surplus reported on hand on December 31st, or as much thereof as will cover an even number of months, together with four per cent compound interest thereon, and leave the procedure for the year 1913 the same as it was during the year 1912; that is, the inspector general of customs will continue depositing the customs receipts in the three depositary banks as before. The British Minister said he thought that by September, or soon after, the accumulations will be enough to take care of the loan obligations for the year, and the subsequent receipts may be depo:ited, as collected, among the indemnity banks for the indemnity account.

le then formulated an identic letter to be sent to the respective banks and also a communication to be sent to the Foreign Office by the Dean, asking its consent to the arrangement and that an order be given the inspector general to distribute the surplus to the indemnity account in the manner agreed upon. My letter was sent the International Banking Corporation on January 18th, and on January 23rd I was notified by the Peking branch of the bank that a deposit of $757,900 had been made therein at Shanghai for the account of the American Government. I have since received a reply to my letter to the International Bank at Shanghai. * * I have [etc.]

W. J. Calhoun.

CLAIMS OF AMERICAN CITIZENS AGAINST CHINA.1 File No. 493.11H52/40.

The Acting Secretary of State to the American Minister.

[Extract. )

No. 290.)

DEPARTMENT OF STATE,

Washington, October 4, 1912. • Sir: In view of the claims already presented and the likelihood that others will be forthcoming, it is requested that the Legation report what action, if any, has been taken by the commission appointed by the Diplomatic Body at Peking to formulate principles for the guidance of the various Legations in disposing of the claims of their respective nationals against China resulting from recent disturbances. I am [etc.]

HUNTINGTON WILSON.

File No. 493.11/367.
The American Minister to the Secretary of State.
[Telegram--Paraphrase-Extract.]

AMERICAN LEGATION.

Peking, December 31, 1912. At a meeting of the French and Japanese Ministers with the Chinese Minister for Foreign Affairs and the Minister of Finance this morning the Minister for Foreign Affairs admitted in principle his Government's liability for damages caused to foreigners by the revolution, and agreed that claims should be settled by the Government of China with the diplomatic representatives of the interested Powers. In case of disagreement about disputed claims they will be referred to arbitration. The Government of China is willing to borrow two million pounds sterling to pay these claims. The French and Japanese Ministers reported the above to their colleagues this afternoon.

CALHOUN. File No. 493.11/379. The American Chargé d'Affaires to the Secretary of State.

[Extract.] No. 814.]

AMERICAN LEGATION,

Peking, April 17, 1913, Sir: Referring to the Department's instruction No. 290, of October 4, 1912, requesting the Legation to report what action, if any, had been

* Continued from For. Rel. 1912, p. 171.

taken by the commission appointed by the Diplomatic Body to classify the claims of foreign residents of China arising out of the revolution and to make recommendations in regard to them, I have the honor to send enclosed a copy of the commission's report, which was presented to the Diplomatic Body at its meeting held April 7th. The diplomatic representatives, after some slight amendments, adopted the report and decided to recommend its approval by their Governments.

Mr. Calhoun was chairman of the commission mentioned, and the report was practically completed before he left. Upon his departure, at the request of the commission, I accepted a place thereon, but there was only one meeting held thereafter: that for the final reading and adoption of the report.

The principle of liability was admitted by the first Premier of the Republic, Tong Shao-vi, in his address at Nanking on March 29th, 1912 [before the so-called National Assembly, at Nanking). Practical recognition of the liability was also given by the settlement of certain claims of French citizens in the Province of Yunnan. These, however, were probably settled by the provincial authorities. A general admission of the principle of liability was made also by the Minister of Finance in his letter of February 1, 1913, to the six Ministers.

But to dispel all doubt in regard to the matter a committee consisting of the Ministers of Great Britain, France, Germany and Italy was appointed by the Diplomatic Body on April 7th to call upon the Minister of Foreign Affairs and discuss the subject with him.

As will appear from the report of the committee, enclosed, the Ministers mentioned called upon the Minister of Foreign Affairs on April 10th and stated that they had been appointed to discuss with him the question of foreign claims arising out of the revolution and to propose that the Foreign Office should appoint representatives to meet representatives of the different Legations to go into the claims and agree upon the amounts due.

The report of the committee came up for consideration at the next meeting of the Diplomatic Body, April 16th. It was decided to agree to the proposal of the Minister of Foreign Affairs that representatives of the Ministries of Finance and the Interior, if so desired, should take part in the joint examination of claims and to propose that the meetings be held at the Foreign Office three days each week. It was further agreed that the order in which the Legations should present their claims should be determined after the Chinese Government should have appointed its representatives. * * *

The Diplomatic Body further agreed that the head of each Mission, in transmitting to his Government the report of the commission on classification of claims, should point out the desirability of approving the report without amendment, if possible, in order to secure uniformity in the treatment of claims by the several Powers and prevent delay in their consideration. Amendment by one or more Powers may lead to further prolonged discussion and consequent loss of time.

It was decided to be advisable, furthermore, to call attention to the statement made in the second paragraph of the report on classification of claims to the effect that the commission did not consider

it within their province to express an opinion on the subject of indemnities to foreign governments for military and naval expenses, and to suggest that the foreign offices of the Powers concerned should consult together and agree upon a uniform policy in regard to such expenses. I have the honor, in reporting this suggestion to the Department, to express the hope that the impoverished Government of China will not be compelled to bear the heavy burden of compensation for such expenditures, and that the Department may be disposed to use its good offices to induce the other Powers concerned to accord the young Republic of China a generous treatment in this regard. * * *

In transmitting this report, I have the honor to request that if it shall meet with the approval of the Department, I may be instructed by cable to that effect so that the Legation may at once proceed to elassify American claims accordingly and formally present to the Chinese Government those that fall within the categories A and B. I have [etc.]

E. T. WILLIAMS.

[Inclosure 1.)

Diplomatic Circular No. 58.

PEKING, March 1h, 1913. The Dean has the honour to circulate a report which he has received from the Commission appointed by the Diplomatic Body to investigate the question of foreign claims arising out of the Revolution and would suggest that it shouldl form the subject of examination at a meeting of the Heads of Missions.

REPORT OF THE CLAIMS COMMISSION.

The Commission entrusted by the Diplomatic Body with the examination of the principles relating to foreign claims arising out of the revolution have in the first instance examined each case communicated to them by the various legations. They then grouped the claims according to their general character and subdivided them in convenient categories. The object of the Commission' in so doing was to furnish the Diplomatic Body with a common basis for estimating the acceptability of the claims which have been or will be submitted by those interested to their respective Legations.

The Commission did not consider it was within their province to express an opinion on the subject of indemnities to foreign Governments for military and na val expenses as the decision whether or not to present such claims rests, in the view of the Commission, with the Governments themselves.

It will be seen then that the Commission have divided the claims into four general classes. Class A corers those which, in their opinion, must be regarded as arising directly and immediately out of the Revolution, and the responsibility for which the Chinese Government cannot disclaim. Class B embraces claims which, while legitimate in principle, are probably not in every case attributable to the Revolution and are therefore open to discussion. Class C covers claims for losses in respect of which the Commission do not consider that an indemnity ea fairly be demanded from the Chinese Government. Class D includes claims which the Commission do not consider can properly be classed among the Resolutionary claims.

The accompanying minutes of the meetings will be found to illustrate the views of the Commission on the several questions which arose in the course of discussion and the Commission confine themselves here to drawing attention to the following points in particular:

In the case of merchandise destroyed or looted, it is understood that the owner ought to be entitled to compensation equal to the market value of the fools prevailing at the time of loss, or in the case of export goods, to the contract price.

In determining the rates at which compensation should be paid for death or injury the Commission have the honour to suggest that the principles adopted by the Crown Advocate of His Britannic Majesty's Government in adjudicating the Boxer claims might be followed. An extract from Mr. Wilkinson's report is enclosed for the convenience of the Diplomatic Body.

In the case of damages caused to foreigners by the destruction, deterioration or loss of property held by them as security, it should be understood that the indemnity payable on that account cannot exceed the amount of the debt for wbich such security was given.

It should be explained that in the use of the words “ Chinese Government " or * Chinese authorities," the Commission have drawn no distinction between the Imperial and the Revolutionary or Republican authorities.

The Commission recommend that interest payable on claims admitted should not exceed fire per cent. on personal elaims or seren per cent. on commercial claims from the date of loss to the date of payment.

CLASS A. Indemnities to Junicipalities :

1. Destruction and loss, as the direct result of the Rerolution, of movable and immovable property belonging to foreign municipalities.

2. Expenses for protection and self-defense, including loss caused by the deterioration and [sic] unused provisions recognized as of a municipal character. Indemnities to Societies, Firms and Individuals:

3. Destruction and loss of movable and immovable property, including goods, personal effects, money and documents of commercial value belonging to foreign societies, ürpıs and individua ls, whether in the capital, a treaty port, or in the interior: (a) in the course of or as a direct result of warlike operations, or by the act of looting soldiers or other undisciplined troops; or (b) by the aet of robbers or pirates or as a result of acts of an anarchical character.

4. Goods under transit pass imported or destined for export, the property of foreign merchants, looted or destroyed by Chinese soldiers and robbers in the interior.

5. Loss sustained owing to appropriation by Chinese authorities of sampans, wliarfs, pontoons, hulks, launches, pontoon bridges, railway material, ammunition and other explosives and any other kind of goods belonging to foreigners.

6. Compensation for: (a) foreigners who lost their lives or were injured physically and incapacitated as a result of the Revolution; and (b) Chinese ia foreign employment similarly affected in the performance of their duty to their foreign employers.

7. Salaries and other payments due under contract to foreigners in Chinese Gerernment service or institutions unpaid owing to the Revolution.

8. Actual loss for non-fulfillment or delay in execution, owing to the Revolution and through no fault of the foreign claimants, of contracts and other engagements entered into by foreign firms and individuals with the Chinese authorities; such loss includes freight, reshipment, storage, insurance, and loss or deterioration of goods.

9. Traveling expenses of foreigners in Chinese official or semi-official service to an adjacent place of safety and return journey. Extra living expenses during absence, and rent of houses.

10. Deposits of money or investments in Chinese Government Banks or other Government Departments, not recovered.

11. Actual loss in industrial enterprises such as damage to and deterioration of machinery and materials, resulting from unavoidable suspension or delay in working owing to local Revolutionary disturbances.

12. Rents not recoverable and rents paid in advance where occupation and use trere actually prevented by military operations or the acts of Chinese soldiers.

13. Damages caused to foreigners by the destruction, deterioration or loss of property held by them as security.

CLASS B.

Indenmities to Societies, Firms and Individuals:

1. Expenses incurred in protecting movable and immovable property belonging to foreign societies, firms and individuals in the capital, in a treaty port or in the interior.

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