[This Document is the Property of His Britannic Majesty's Government.]
AFFAIRS OF CHINA.
CONFIDENTIAL.
[35223]
No. 1.
108
[October 19.]
SECTION 1. CO
41844
JA NOV 06
Sir,
Treasury to Foreign Office.-(Received October 19.)
Treasury Chambers, October 18, 1906. WITH reference to your letter of the 29th August last, and Treasury reply thereto of the 3rd instant, respecting the payment of the British share of the China indemnity for the half-year ended the 30th June last, I am directed by the Lords Commissioners of His Majesty's Treasury to state, for the information of Secretary Sir E. Grey, that they are not fully satisfied as to the correctness of the charge of 4 per cent. commission on the monthly instalments payable by China to Great Britain which appears in the statements of the indemnity payments in the last two half-years.
+
Up to the 30th June, 1905, the half-yearly instalments of the indemnity were remitted home iu full, and commission at the rate of 4 per cent. was charged by the Hong Kong and Shanghae Banking Corporation in London. But since the signing of the new bonds on the 2nd July, 1905, and the introduction of the present system of payment, the monthly instalments have been subjected to a charge of 4 per cent. com- mission, which has been deducted at Shanghae, and the net amount only has been remitted to London.
I am to observe that, whereas under the Protocol China's obligation was only to pay the instalments as they fell due in Shanghae, the present agreement is that she should pay the British share in gold in London. If, therefore, the charge of per cent. represents the cost or part of the cost of remittance to London, it is not clear how the deduction can be justified. But my Lords are not aware whether the deduction is made for the benefit of China, reducing the charges she would otherwise have to pay, or whether it is for the benefit of the bank. If the deduction is made for the benefit of latter, I am to request that my Lords may be furnished with an explanation of what the precise service is for which the bank charges this commission.
I am, &c. (Signed) E. W. HAMILTON.
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