Inclosure in No. 1.
Mr. Townley to Prince Ch'ing.
Your Highness,
Peking, March 6, 1903.
IN the course of a conversation which I had the honour to have with your Highness on the 3rd instant you stated that the Chinese Minister in London had reported that he had submitted to the Marquess of Lansdowne the proposal of the Chinese Government that, in order to meet the increased demands upon China on account of the indemnity in consequence of the fall in the price of silver, the customs duties should be payable in gold. Your Highness added that the Minister had received no definite answer from Lord Lansdowne.
Your Highness will remember that I at once informed you that the Chinese Representative must have entirely misunderstood Lord Lansdowne, since his Lordship had informed me by telegraph that the Chinese Minister had been told that His Majesty's Government could not entertain the proposal, whilst my own instructions had, from the first, been most explicit in that same sense.
In order that there should be no possibility of confusion, I reported our conversation of the 3rd instant to Lord Lansdowne by telegraph, and have now received a reply expressing surprise that the Chinese Minister in London should have so completely misunderstood the terms of a note addressed to him on the 9th ultimo, and instructing me to repeat to your Highness what I had the honour to say during our conversation, namely, that His Majesty's Government cannot entertain the proposal that customs duties should be payable in gold.
I avail, &c.
(Signed)
WALTER TOWNLEY.
No. 2.
Mr. Townley to the Marquess of Lansdowne.-(Received April 27.) (No. 96.)
My Lord,
Peking, March 12, 1903.
WITH reference to my despatch No. 79 of the 4th instant reporting a conversation I had with Prince Ch'ing on the subject of the Chinese indemnity, I have the honour to transmit to your Lordship herewith translation of a note which His Highness has addressed to the doyen of the Diplomatic Body, reminding him that no answer has been received to the note from the Foreign Board under date of the ultimo, requesting that the foreign Representatives in Peking would submit, for the consideration of their respective Governments, a proposal of the Chinese Government that import duties should be levied on a gold basis with the value of the tael fixed at 3s., the rate chosen by the framers of the Final Protocol at which the indemnity should be paid.
As your Lordship will perceive, Prince Ch'ing points out that the scheme proposed by the Chinese Government is really a proper method of procedure. According to the general purport of the Protocol, since Article 6 of that Act, in its section having reference to the resources fixed upon as security for the bonds, states that the duty on imports shall be raised to an effective 5 per cent. ad valorem duty, whereas actually owing to the depreciated value of silver, as compared with the prevailing rate at the date of the Protocol, it is, as a matter of fact, not equal to 4 per cent.
The note deliberately avoids all reference to the signature of the fractional bonds which has been demanded in a joint note before the foreign Representatives will consent to submit the Chinese proposals to their respective Governments.
I have, &c.
(Signed)
WALTER TOWNLEY.
3
Inclosure in No. 2.
Prince Ch'ing to Doyen of Diplomatic Body.
March 10, 1903.
(Translation.)
ON the 8th of the 1st moon, 29th year of Kuang Hsü, our Board sent a despatch, replying to your Excellency, dean of the Diplomatic Corps, in which we proposed that, owing to the rising price of gold which was making the amounts of silver appropriated by China in accordance with the Table of Amortization of the Protocol for the payment of the indemnity insufficient for that purpose, the revised tariff should be considered a gold tariff, and requested you to transmit the said despatch to the Ministers of the various Powers for their information, that their respective Governments might take the matter into consideration, so as, on the one hand, to determine a reliable method of procedure, and on the other hand, enable us, Prince and Ministers, to issue instructions to the Shanghae Taotai to make the necessary preparations in the matter of the fractional bonds, all of which is a matter of record.
Not having received any reply, it becomes necessary for me to again set forth clearly that the payment of the customs duties in accordance with the price of gold is really a proper method of procedure according to the general purport of the Protocol, and by no means an extraordinary demand.
As we
Examination shows that Article 6 of the Protocol, in the first item of the section concerning the resources fixed upon as a security for the bonds (Article 6 (e) 1), says that the duty on imports shall be raised to an effective 5 per cent. ad valorem. must consider the capital invested in foreign goods as originally a gold investment, when the price of gold becomes dear, the equivalent in silver of the prices of these goods must be increased, and the duty upon them collected in silver ought to increase in proportion; only so it can be considered an effective 5 per cent.
The price of gold at present, as compared with that of the date at which the Protocol was signed, is, generally speaking, one-third dearer, from which it may be seen that the silver of the customs duties is in a way reduced by one-third, and has only the empty name of being 5 per cent. ad valorem; as a matter of fact, is not equal to 4 per cent. Therefore, the silver payments of the tariff ought to be reckoned according to the price of gold at the date of the signing of the Protocol, in which case only will they correspond with the idea of an effective 5 per cent.
Moreover, the Protocol regards this matter as that which furnishes security for the bonds, and since the various Powers desire that the indemnity mentioned in the bonds shall be carefully reckoned in gold, the customs duties, increased so as to make them a security for the bonds, ought also to be calculated in gold. Such a course would be just; any other must result in making the customs duties by no means an effective 5 per cent., and the resources allowed for security become deficient. How then can China bear the blame?
As in duty bound, I send this despatch to your Excellency the dean, requesting you to transmit it to the Ministers of the various Powers that they may take into consideration what I have said above as to the collection of the duties in gold being in real accord with the purport of the Protocol to have an effective 5 per cent., so as to make a perfect security for the bonds, and communicate the same to their respective Governments that they may consider it and send reply.
164
2
Inclosure in No. 1.
Mr. Townley to Prince Ch'ing.
Your Highness,
Peking, March 6, 1903. IN the course of a conversation which I had the honour to have with your Highness on the 3rd instant you stated that the Chinese Minister in London had reported that he had submitted to the Marquess of Lansdowne the proposal of the Chinese Government that, in order to meet the increased demands upon China on account of the indemnity in consequence of the fall in the price of silver, the customs duties should be payable in gold. Your Highness added that the Minister had received no definite answer from Lord Lansdowne.
Your Highness will remember that I at once informed you that the Chinese Repre- sentative must have entirely misunderstood Lord Lansdowne, since his Lordship had informed me by telegraph that the Chinese Minister had been told that His Majesty's Government could not entertain the proposal, whilst my own instructions had, from the first, been most explicit in that same sense.
In order that there should be no possibility of confusion, I reported our conversation of the 3rd instant to Lord Lansdowne by telegraph, and have now received a reply expressing surprise that the Chinese Minister in London should have so completely misunderstood the terms of a note addressed to him on the 9th ultimo, and instructing me to repeat to your Highness what I had the honour to say during our conversation, namely, that His Majesty's Government cannot entertain the proposal that customs duties should be payable in gold.
I avail, &c.
(Signed)
No. 2.
WALTER TOWNLEY.
Mr. Townley to the Marquess of Lansdowne.-(Received April 27.) (No. 96.) My Lord,
Peking, March 12, 1903. WITH reference to my despatch No. 79 of the 4th instant reporting a conversation I had with Prince Ch'ing on the subject of the Chinese indemnity, I have the honour to transmit to your Lordship herewith translation of a note which His Highness has addressed to the doyen of the Diplomatic Body, reminding him that no answer has been received to the note from the Foreign Board under date of the ultimo, requesting that the foreign Representatives in Peking would submit, for the con- sideration of their respective Governments, a proposal of the Chinese Government that import duties should be levied on a gold basis with the value of the tael fixed at 38., the rate chosen by the framers of the Final Protocol at which the indemnity should be paid.
As your Lordship will perceive, Prince Ch'ing points out that the scheme proposed by the Chinese Government is really a proper method of procedure. According to the general purport of the Protocol, since Article 6 of that Act, in its section having reference to the resources fixed upon as security for the bonds, states that the duty on imports shall be raised to an effective 5 per cent. ad valorem duty, whereas actually owing to the depreciated value of silver, as compared with the prevailing rate at the date of the Protocol, it is, as a matter of fact, not equal to 4 per cent.
The note deliberately avoids all reference to the signature of the fractional bonds which has been demanded in a joint note before the foreign Representatives will consent to submit the Chinese proposals to their respective Governments.
I have, &c.
(Signed)
WALTER TOWNLEY.
3
Inclosure in No. 2.
Prince Ching to Doyen of Diplomatic Body.
March 10, 1903.
(Translation.)
ON the 8th of the 1st moon, 29th year of Kuang Hsü, our Board sent a despatch, replying to your Excellency, dean of the Diplomatic Corps, in which we proposed that, owing to the rising price of gold which was making the amounts of silver appropriated by China in accordance with the Table of Amortization of the Protocol for the payment of the indemnity insufficient for that purpose, the revised tariff should be considered a gold tariff, and requested you to transmit the said despatch to the Ministers of the various Powers for their information, that their respective Governments might take the matter into consideration, so as, on the one hand, to determine a reliable method of procedure, and on the other hand, enable us, Prince and Ministers, to issue instructions to the Shanghae Taotai to make the necessary preparations in the matter of the fractional bonds, all of which is a matter of record.
Not having received any reply, it becomes necessary for me to again set forth clearly that the payment of the customs duties in accordance with the price of gold is really a proper method of procedure according to the general purport of the Protocol, and by no means an extraordinary demand.
As we
Examination shows that Article 6 of the Protocol, in the first item of the section concerning the resources fixed upon as a security for the bonds (Article 6 (e) 1), says that the duty on imports shall be raised to an effective 5 per cent, ad valorem. must consider the capital invested in foreign goods as originally a gold investment, when the price of gold becomes dear, the equivalent in silver of the prices of these goods must be increased, and the duty upon them collected in silver ought to increase in proportion; only so it can be considered an effective ō per cent.
The price of gold at present, as compared with that of the date at which the Protocol was signed, is, generally speaking, one-third dearer, from which it may be seen that the silver of the customs duties is in a way reduced by one-third, and has only the empty name of being 5 per cent, ad valorem; as a matter of fact, is not equal to 4 per cent. Therefore, the silver payments of the tariff ought to be reckoned according to the price of gold at the date of the signing of the Protocol, in which case only will they correspond with the idea of an effective 5 per cent.
Moreover, the Protocol regards this matter as that which furnishes security for the bonds, and since the various Powers desire that the indemnity mentioned in the bonds shall be carefully reckoned in gold, the customs duties, increased so as to make them a security for the bonds, ought also to be calculated in gold. Such a course would be just; any other must result in making the customs duties by no means an effective How then can 5 per cent., and the resources allowed for security become deficient. China bear the blame?
As in duty bound, I send this despatch to your Excellency the dean, requesting you to transmit it to the Ministers of the various Powers that they may take into consideration what I have said above as to the collection of the duties in gold being in real accord with the purport of the Protocol to have an effective 5 per cent, so as to make a perfect security for the bonds, and communicate the same to their respective Governments that they may consider it and send reply.
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