What China has to pay and the form in which it is to be paid is fairly clearly defined in the '1901 protceo] and is further defined beyond all possibility of doubt in the 1905 agreement between
Powers. In the protocol the debt Prince Ching and the protocol was stated to be Tls. 450,000,000 but it was specifically stated that this was a gold debt "calculated at the rate of the Haikuan tael to the gold currency of each country.". A fixed exchange was then given showing the relation "of the tael to the "gold currency of each country", in which the tael is stated to be Frs. 3.750. In other words what is demanded is that for each thousand taels of indemnity due to France China must pay Frs. 3,750 gold currency, whether this happens to cost China more or less than a thousand taels.
Clear as this may appear to be, the Chinese could not see it for some years. From 1901 until January 1905 the Chinese paid all of the indemnity to the various Powers in Haikuan taels without reference to the stipulated exchange and as exchange during this period happened to favour China, the Powers lest sums which were in the aggregate equivalent* to TIs. 8,000,000. In 1905 China was finally forced to see that she was not abiding by the terms of the protocol and the issue Was settled, supposedly for all time, by the payment of an additional Tls. 8,000,000, of which France then received Frs, 4,684,- 727.62, or Protocol Tls. 1,249, 260.70. In his note to the Powers Prince Ch'ing recognized "that the sum of TIs. 450,000,000 constitutes a gold debt, that is to say for each Haikuan tael due to each of the Powers, China must pay in gold the amount which is shown in Article VI of the Final Protocol as the equivalent of one tael." Mr. Rockhill, the American Minister, was then the only member of the Diplomatic Body who did not put this interpretation upon the Protocol and therefore the only one who did not sign the joint note to Prince Ch'ing accepting this interpretation and fixing the additional claim at Tls. 8,000,000. If American.currency were' greatly depreciated China might quibble with America still about the form of payment and claim the right ta pay the United States in paper dollars. Such a contention with regard to any other protocol Power is, however, absurd in the face of the 1905 agreement.
AN IGNORANT AGITATION, Every Chinese with a knowledge of the treaties or with an understanding of exchange has recognized from the beginning that China's contention that she could pay France 3,750 depreciated paper frances for every thousand taels of indemnity due was absurd. As 7 one member of the Diplomatic Corps has said, the entire German indemnity would not amount to 15 shillings at this rate and the balance of the Russian indemnity could be wiped out for a few hundred dollars. What actually prompted all the agitation against the resumption: of gold payments to France was the conviction in the minds of the Chinese bankers that they had a moral right to make trouble for France and for the Banque Industrielle de Chine. Some of the leading bankers got it into their heads, whether rightly or wrongly, that the French proposed to collect gold francs and then indemnify the creditors of the Banque Industrielle with an equivalent number of paper francs. This the bankers thought an outrageous scheme and they were also angry because the Banque Indust-nolle refused to redeem the banknotes which the Chinese banks had bought in for them immediately after the collapse.
With the idea of airing these real or supposed grievances the bankers therefore contrived to ive a number of Parliamentarians the idea that France was about to impose an intolerable burden upon China and inspired these ignorant legislators with the thought that China had a right to refuse gold payments and to discharge the balance of the indemnity in French paper. From Parliament the discussion got into the Chinese press where it has been characterized by a complete ignorance of treaty stipulations and the history of the indemnity.
Popular feeling, under the guidance of the press, has been so intense that the administration has been forced to adopt the popular attitude and Dr. Wellington Koo hes taxed his ingenutty to the utmost to make out some sort of a case against France. He is presumably the father of the contention that between 1905 and 1917 France estaplished the precedent of accepting the indemnity at current exchange by telegraphic transfer and that China therefore has-the right now to remit the indemnity payments at current exchange by telegraphic transfer. These who support this contention say that France deliberately. chose to be paid by telegraphic transfer in 1905, which is true, but this does not affect - China's case in any way because France did not choose in 1905 to be paid at current exchange rates, but, as the text of the agreement plainly shows, at a fixed gold exchange. If France did accept current exchange between 1905 and 1917 (a Chinese contention which the writer has had no opportunity to verify) it was presumably because the current exchange was og good as the nrotocol rate or better, but in any event this would not constitute a precedent because in 1905 it was demonstrated to China that the claim for gold could be made retractive. In other words if France was underpaid at any time between 1905 and 1917,. she could now enter a claim for the difference as the Powers did in 1905.
Text read from the printed page and cleaned; old type leaves the occasional error.