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the United States, upon Secretary Root's recommendation, to reduce the indemnity bond of $24,400,000, to which the United States was entitled for losses incurred in the Boxer troubles, to the sum of $13,655,492.69, and "to remit the remainder of the indemnity as an act of friendship." 2 In acknowledging this action of the United States, the Prince of Ch'ing said, under date of July 14, 1908:

On reading this dispatch I was profoundly impressed with the justice and great friendliness of the American Government, and wish to express our sincerest thanks. Concerning the time and manner of the return to China of the amounts to be remitted, the Imperial Government has no wishes to express in the matter. It relies implicitly on the friendly intentions of the United States Government, and is convinced that it will adopt such measures as are best calculated to attain the end it has in view.

The Imperial Government, wishing to give expression to the high value it places on the friendship of the United States, finds in its present action a favorable opportunity for doing so. Mindful of the desire recently expressed by the President of the United States to promote the coming of Chinese students to the United States to take courses in the schools and higher educational institutions of the country, and convinced by the happy results of past experience of the great value to China of education in American schools, the Imperial Government has the honor to state that it is its intention to send henceforth yearly to the United States a considerable number of students there to receive their education.3

In a note of the same date the Chinese Government informed the American Minister that "it has now been determined that from the year when the return of the indemnity begins 100 students shall be sent to America every year for four years, so that 400 students may be in America by the fourth year. From the fifth year and throughout the period of the indemnity payments a minimum of 50 students will be sent each year." 4

The Chinese Government evidently regarded this act of the United States as a manifestation, as it was, of extraordinary friendliness and interest, and appointed a special envoy "to express the thanks of China for the action of the United States in reference to the indemnity." American ideas and ideals were rightly considered by the Chinese Government as equal, if not superior, to American dollars.

Our readers will be prepared by this brief introduction to appreciate the important statement issued by President Wilson on March 19, 1913, 2 Foreign Relations of the United States (1908), p. 64.

3 Idem., p. 68.

Idem., p. 68. For the subsequent negotiations on this very interesting and important matter, see idem, pp. 69–75.

after conference with Secretary Bryan, which repudiates dollar diplomacy in the Far East, and by implication elsewhere, and which is not only in accordance with but restores the best traditions of American diplomacy.

We are informed that at the request of the last administration a certain group of American bankers undertook to participate in the loan now desired by the Government of China (approximately $125,000,000). Our government wished American bankers to participate along with the bankers of other nations, because it desired that the good will of the United States towards China should be exhibited in this practical way, that American capital should have access to that great country, and that the United States should be in a position to share with the other Powers any political responsibilities that might be associated with the development of the foreign relations of China in connection with her industrial and commercial enterprises. The present administration has been asked by this group of bankers whether it would also request them to participate in the loan. The representatives of the bankers through whom the administration was approached declared that they would continue to seek their share of the loan under the proposed agreements only if expressly requested to do so by the government. The administration has declined to make such request because it did not approve the conditions of the loan or the implications of responsibility on its own part which it was plainly told would be involved in the request.

The conditions of the loan seem to us to touch very nearly the administrative independence of China itself; and this administration does not feel that it ought, even by implication, to be a party to those conditions. The responsibility on its part which would be implied in requesting the bankers to undertake the loan might conceivably go to the length in some unhappy contingency of forcible interference in the financial, and even the political, affairs of that great oriental state, just now awakening to a consciousness of its power and of its obligations to its people. The conditions include not only the pledging of particular taxes, some of them antiquated and burdensome, to secure the loan, but also the administration of those taxes by foreign agents. The responsibility on the part of our government implied in the encouragement of a loan thus secured and administered is plain enough and is obnoxious to the principles upon which the government of our people rests.

The Government of the United States is not only willing, but earnestly desirous, of aiding the great Chinese people in every way that is consistent with their untrammeled development and its own immemorial principles. The awakening of the people of China to a consciousness of their possibilities under free government is the most significant, if not the most momentous event of our generation. With this movement and aspiration the American people are in profound sympathy. They certainly wish to participate, and participate very generously, in opening to the Chinese and to the use of the world the almost untouched and perhaps unrivalled resources of China. The Government of the United States is earnestly desirous of promoting the most extended and intimate trade relationships between this country and the Chinese Republic. The present administration will urge and support the legislative measures necessary to give American merchants, manufacturers, contractors, and engineers the banking and other financial facilities which they now lack, and without which

they are at a serious disadvantage as compared with their industrial and commercial rivals. This is its duty. This is the main material interest of its citizens in the development of China. Our interests are those of the open door ship and mutual advantage. This is the only door we care to enter.

a door of friend

It is impossible to read this calm and measured statement without a thrill at the restoration and reaffirmation of policies which in the past have made the American name known and respected in the uttermost parts of the earth. President Wilson and Secretary Bryan are as desirous as any of their predecessors to advance the industry and commerce of the United States, but they are unwilling to single out groups. of interests for preferential treatment, and they are deeply solicitous that American dollars may not directly or indirectly carry in their trail danger to the independence or freedom of action of a great and struggling nation, with which we have always sympathized and which we desire to see both happy and prosperous at home and respected as an independent Power abroad.

The turn of affairs in China is a source of gratification to the American people, who justly see in the republican form of government the triumph of those principles of self-government and that form of government which they proclaimed in the last quarter of the eighteenth century and to which they are unalterably attached. "The awakening of the people of China," to quote the exact language of the statement, "to a consciousness of the possibilities under free government is the most significant, if not the most momentous, event of our generation. With this movement and aspiration the American people are in profound sympathy. They certainly wish to participate, and participate very generously, in opening to the Chinese and to the use of the world the almost untouched and perhaps unrivalled resources of China;" but President Wilson and Secretary Bryan are, it is to be hoped, unalterably opposed to a policy which may be ruinous to China's best interests and which is certainly opposed to American traditions, for they solemnly declare that the government of the United States is not only willing, but "earnestly desirous of promoting the most extended and intimate trade relationships between this country and the Chinese Republic. The present administration will urge and support the legislative measures necessary to give American merchants, manufacturers, contractors, and engineers the banking and other financial facilities which they now lack, and without which they are at a serious disadvantage as compared with their industrial and commercial rivals.

This is its duty. This is the main material interest of its citizens in the development of China. Our interests are those of the open door — a door of friendship and mutual advantage. This is the only door we care to enter."

Immediately upon the publication of President Wilson's statement the American bankers interested in the Six-Power loan issued a statement which, by reason of its importance and in fairness to them should be quoted. It therefore follows in full:

The American group, consisting of J. P. Morgan & Co., Kuhn, Loeb & Co., the First National Bank and the National City Bank, was formed in the spring of 1909 upon the expressed desire of the Department of State that a financial group be organized to take up the participation to which American capital was entitled in the Hukuang Railway loan agreement then under negotiation by the British, French and German banking groups.

This group thus became interested in Chinese loan matters, not primarily for its own profit, but for the purposes indicated by President Taft and Secretary Knox. As stated in President Taft's message to Congress of December, 1909, these purposes, in effect, called for the co-operation of the bankers as the "indispensable instrumentality" which the American Government needed to enable it to "carry out a practical and real application of the open door policy." The Department of State considered that American co-operation with the banking groups of the several great Powers enabled the United States to exercise a practical voice in China's affairs and constituted the best guarantee for the preservation of China's integrity.

In pursuance of the policy so advocated, the American group, with the Administration's approval, entered into an agreement with the British, French and German groups for the purpose of rendering financial assistance to China. In February, 1912, these four groups, at the request of their respective Governments and with the consent of the Chinese Government, admitted Russian and Japanese financial groups to the negotiations for the reorganization loan, thus constituting what has since been known as the six Power group.

Following the revolution and despite the fact that the authority of the new republic had not been generally accepted, the American group joined with the other groups in making to the provisional Government substantial advances to enable it more firmly to establish its authority and to restore normal conditions throughout the country. Meanwhile there had been in negotiation, during a period of many months, a loan agreement which, in its general terms, appeared last month to meet the approval of the six Governments, of their banking groups, and the Chinese Government, and to be ready for signature.

These terms were intended to cover two points. The first was to enable the Chinese Government to reorganize its administration on an effective modern basis, to pay off its large outstanding debts and build up Chinese credit. The second was to protect the interests of American and European investors. For such protection, in the judgment of the Governments and the groups, the only method was to insure, despite any possible recurrence of political unrest in China, the proper expenditure of the funds

loaned to China and to safeguard the handling of the revenues pledged for the principal and interest on the bonds.

As announced in the statement given to the press yesterday, the present Administration at Washington, with a desire to be of assistance to China and to promote American interests in the Far East, has decided that these purposes may better be served by the adoption of a different and independent policy. As the American group had been ready to serve the Administration in the past, irrespective of the heavy risks involved, so it was disposed to serve the present Administration if so requested. But deferring to the policy now declared, the group has withdrawn entirely from the Chinese loan negotiations and has so advised the European and Japanese banking groups.

THE FUR SEAL CONVENTION AND THE FIVE-YEAR CLOSED SEASON IMPOSED BY CONGRESS

The Government of the United States after urging in vain for upwards. of twenty years upon the other governments concerned the necessity for prohibiting pelagic sealing by an international agreement in order to protect and preserve the fur seal herds, finally, after difficult and protracted negotiations, prevailed upon Great Britain, Japan, and Russia to enter into the North Pacific Sealing Convention of July 7, 1911,1 by which it is agreed that the citizens and subjects of these four Powers shall be prohibited from engaging in pelagic sealing for a fixed period of fifteen years, and for so long thereafter as by the mutual consent of the parties, the convention continues in force. In order to secure the adherence of Great Britain and Japan to this convention, it was necessary for the United States and Russia, as the owners of the breeding grounds to which the only two fur seal herds of any present importance resort, to agree to share in certain proportions and under certain conditions, with Great Britain and Japan, the annual proceeds of the business derived from the land killing of fur seals on the breeding grounds belonging to the United States and Russia. This agreement, so far as it concerns the United States, is contained in Article X of the convention which reads as follows:

The United States agrees that of the total number of sealskins taken annually under the authority of the United States upon the Pribilof Islands or any other islands or shores of the waters mentioned in Article I subject to the jurisdiction of the United States to which any seal herds hereafter resort, there shall be delivered at the Pribilof Islands at the end of each season fifteen per cent (15%) gross in number and value

1 Printed in SUPPLEMENT, Vol. 5, p. 267.

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