493.11/756
The Secretary of State to Senator Henry Cabot Lodge
My Dear Senator Lodge: The delay in making a reply to your letter of May 25th, with reference to the indemnity paid to the United States by China in consequence of the so-called Boxer Rebellion is due to the fact that it has been necessary to make a somewhat searching examination of the records not only of the Department of State but of the Treasury Department as well.
In the negotiations which took place at Peking in connection with the resumption of normal relations with China after the Boxer outbreak, there was much disagreement among the Powers as to the amount of indemnity to be levied upon the Chinese Government. This difficulty was finally overcome through the acceptance of a suggestion, offered by this Government, that a lump sum should be assessed which should later be apportioned among the Powers. The amount thus assessed was fixed by Article 6 of the Final Protocol of September 7, 1901, at Haikwan Taels 450,000,000 (equivalent to $333,900,000 U.S. currency), payable in annual installments, with interest at 4%, over a period of 40 years. The apportionment of this sum among the various nations is shown in a table which forms enclosure No. 1 of this letter.99
The proportion of the principal sum thus fixed as payable to the United States was 7.31979% of the total, i.e., Haikwan Taels 32,939,055, equivalent to Gold dollars 24,440,778.81. Under the joint resolution of May 25, 1908, referred to in your letter, this principal sum was reduced by the remission to China of $10,785,286.12, leaving $13,655,492.69 as the principal due the United States, payable annually, with interest at 4%, over the period ending 1940, made up as follows:
| Sum set aside for payment of private claims | $4,000,000.00 |
| Amount of Government claim for military expenses | 9,655,492.69 |
| $13,655,492.69 |
Of this $13,655,492.69, a further sum of $1, 175,835.64 was returned to China after the remaining outstanding private claims of American citizens had been settled, there remaining a net balance of $12,479,657.05 due, with interest, under the bond as modified in 1908.
I am enclosing a copy of a letter from the Secretary of the Treasury dated June 1, 1921,99a from which it will appear that to date there have been received from China payments totalling $12,413,499.77, representing the payments of principal and interest up to October 1, 1917—the date of the beginning of the five-year period of postponement, allowed by the Allied and Associated Powers upon China’s entry into the war, as recalled in your letter. Of that sum, $2,819,030.43 has been actually applied to the settlement of the private claims of American citizens, out of the $4,000,000 which, as indicated above, was set aside to meet private claims, leaving a balance of $1, 180,969.57 which has been disposed of as follows:
| Returned to China under authority of Joint Resolution of May 25, 1908 | $1,175,835.64 |
| Balance on books of Treasury held as a trust fund and not returnable under Resolution of May 25, 1908 | 5,133.93 |
| $1,180,969.57 |
There has thus been paid by the Chinese Government, over and above the amount devoted to the complete settlement of all private claims, a sum of $8,418,633.70 towards the satisfaction of the only other indemnity charge—that is, the claim of the United States Government for the naval and military expenses incurred by it in the Boxer Relief Expedition, represented by a principal sum of $9,655,492.69. This Government’s original claim for military and naval expenses thus amounts to only $1,236,858.99 more than has actually been received from China on that account; and I believe with you that the remission of further payments upon the principal of such claim, as well as of interest, would be in accordance with the spirit which has traditionally characterized our relations with foreign countries: and I am heartily in sympathy with your proposal that we now put an end to any further payments from China. As stated in your letter, no appropriation would be necessary: a resolution of Congress authorizing the President, within his discretion and in such manner as seems to him wise, to forego further payments as from October 1, 1917, would suffice to accomplish that result. In accordance with your request, I am therefore happy to enclose herewith, for your use in bringing the matter to the attention of Congress, a draft of a resolution1 to that end.
[Page 404]Permit me, in conclusion, to express my appreciation of your interest in this matter, and to assure you of my readiness to furnish more detailed information, if that would be helpful to you, or otherwise to afford such assistance as may lie within the power of this Department.
I am [etc.]