Evading the Boxer Indemnity, Part II

In a previous post, we saw how Beijing attempted to suspend its Boxer Indemnity payments to Russia in December 1917, after the Bolshevik takeover. This failed in the face of Allied opposition and Ambassador Kudashev’s personal guarantee that the funds – then worth some £50,000 a month – would not fall into Bolshevik hands.

Half a year later, however, the Bolshevik regime still showed no immediate signs of collapse and, in January 1918, it informed China that Kudashev had been dismissed. Kudashev was himself in the thick of anti-bolshevik intrigues in Harbin. The Indemnity thus became an increasingly vital source of security, against which he and other pre-revolutionary diplomats could obtain funds. At the same time, their political activities – in particular, their support for Semenov’s attacks into Russia – sorely tested Chinese patience.

In April, the Finance Ministry resolved to cease making Indemnity payments to the Russo-Asiatic Bank until a Russian government was recognised. The funds would be deposited in China’s two state banks instead, and the Foreign Ministry informed Kudashev of this on 8 May. When the latter protested, Foreign Minister Lu Zhengxiang took a somewhat more unyielding approach.

dagu
Chinese New Year print of the attack on the Dagu Forts, June 1900. A Russian ship is at bottom left. Source.

庫使云:今日仍以交付賠款一節,來謁貴總長。月底轉瞬即至,貴總長晤曹總長后,已得確實辦法否,即希明告。

總長云:昨日國務會議時,本總長業向曹總長詳細陳述,曹總長謂當再考慮。

庫使云:此款交付業經數次,如果忽然停付,究有何種理由,本使當正式奉詢也。

總長云:此款初議交付之時,王前財政總長本屬反對,嗣經本部高前次長以擔保一層,商以協商領袖英朱使,朱使請由本部具函送達,俾便據以請求再復,高前次長依照辦理。其后各使以口頭答復贊成付款,均未具有函件,故前王財政總長仍不滿意,以為各使口頭贊同,未足視為証據,深恐將來各國承認之正式政府,以遠東使領各館人員早經免職為辭,對於此項交款,不願承認,要求重行交付。故不如及今將該款留置,以免異日困難雲雲。同人對於此種理由,至今僉以為然。且現在廣義派勢力獨能把持一時,或不幸而該廣義政府,果如報紙傳聞,竟為美國承認,更不幸而英法等諸國,竟起而效之。此時中國萬不得已,亦步協商諸友邦之后塵而承認之。則該政府對於此項交付,不願承認,可斷言也。此事諒無實現之理,但如果成為事實,則本國政府勢將重行交付耳。同人咸以茲事當先籌定辦法,遂決議自本月底起,將該款停止交付,分存中、交兩銀行,俟承認俄國正式政府后,再定交付方法。本國政府此項辦法,純以審慎起見,別無他意也。此事當初經本總長在國務會議迭次磋商,始得同人贊同交付,此次決議停止交付,理由正當,本總長未便再持異議,否則恐本總長為此事或將受過於見好貴使之嫌耳。故日前法柏使來晤,本總長告以若協商各使均以正式函件送達本部,贊同交付此款,本部即可據函再與財政部切實磋商,既將各使共同連帶負其責任,將來對於承認之俄國政府,不能獨以何故交款詢問中國。

Kudashev: I have come to meet you today, again on the matter of the Indemnity payments. The end of the month will soon be here. Was a definite solution reached after your meeting with Finance Minister Cao [Rulin]? Please let me know.

Lu: During the State Council meeting yesterday, I presented the matter in detail to Minister Cao. He said that he would consider it again.

Kudashev: The Indemnity payments have already been made several times. If they are suddenly stopped, I will have to make an official enquiry as to the reason.

Lu: When the Indemnity payments were first discussed, former Finance Minister Wang [Kemin] was against them from the start. Then, former Deputy Foreign Minister Gao [Erqian] discussed the matter of a guarantee with British Ambassador Jordan; Jordan asked our ministry to send a written memorandum as the basis for a reply and Gao complied. Subsequently, the Allied ambassadors verbally responded in support of the payments, but none of them in writing. Hence Wang was still not satisfied. He considered that the ambassadors’ verbal support could not be seen as sufficient proof, and was afraid that a future, internationally-recognised official government might not wish to recognise these payments due to its far eastern consular and diplomatic officials being relieved of their posts. It might then ask for the payments to be made again. Thus, he suggested that the funds could be retained for the moment to prevent future difficulties. Our colleagues hold to this line of reasoning even now.

Moreover, now the Bolsheviks’ strength still prevails for the moment. If it unfortunately comes to pass that the Bolshevik government is recognised by America – as the newspapers say – sadly, France, Britain and other countries must commit the same offence. Then China will have no choice but to follow in the footsteps of its Allied friends in recognising it. That that government will not wish to recognise these payments is absolutely certain. One presumes that this will not happen but, if it does become reality, then my government must make the payments again. My colleagues all believe that, for such an important matter, a plan must be made first. Thus it was decided that from the end of this month, the payments should be stopped and kept in the Bank of China and Bank of Communications. Once an official Russian government has been recognised, then a way to make the payments can be determined. Our government is adopting this measure purely out of caution, with no other intentions.

At the beginning I raised this matter with the State Council multiple times; only then did my colleagues agree to pay. The current decision to cease payments is reasonable and I am not in a position to maintain a dissenting opinion, lest I be suspected of partiality towards Your Excellency on this matter. Hence, when French Ambassador Boppe met with me yesterday, I told him that if the Allied ambassadors could all furnish our ministry with an official memorandum in support of these payments, I could use it as a basis for practical discussions with the Finance Ministry, that the ambassadors will share joint responsibility such that a future, recognised Russian government will not question China on why the payments were made.

alliedarms
Allied ambassadors gather at the British Legation on Armistice Day, 1918. Source.

Lu’s claim that China was withholding access to the Indemnity payments “purely out of caution” was disingenuous. As Kudashev pressed him further, he admitted that it was retaliation for the establishment of an anti-bolshevik administration centering around the Chinese Eastern Railway in Harbin.

庫使云:協商各使共同具一函件,擔保此項交付,恐難辦到。各使意見即僉以為可以交付,聲明在前,現又何必多此一舉。本使時以此事商懇各使,亦覺過於煩數,難乎為情。茲本使籌一通變之方,此后該款果存中、交兩行,能否將遠東使領各館經費,逐月於該存款內提出交付。貴總長以為如何。

總長云:能如此辦理,亦當於國務會議時,與曹總長磋商。惟將來承認之俄政府,或即為廣義派政府,不認中國應交款項於政府停止其職務之外交官、領事官,將若之何。

庫使云:貴國現未承認廣義派為本國政府,將來不論承認何種政府,可告以在未承認新政府以前,交付款項於現經承認之政府代表,未嘗不是。本使已與曹財政總長約本日下午五時往談此事,貴總長贊同本使往晤與否,如不贊同,可以電話解約。

總長云:貴使盡可往晤。

庫使云:聞曹總長以東省鐵路股東開會一事,不滿意於本使,未識確否。

總長云:曹總長確不滿意,國務會議同人,亦均失望。緣傅疆代表郭督辦蒞會主席,而該會乃別推臨時主席,決議各款,異常專擅,傅氏未發一言。旋以籌定計劃尚待發表,以在京繼續開會,商得霍中將之同意。而霍中將忽又返哈,開會不果。乃思法瑪代辦抗議此事之時,貴使與本國政府商量疏解之法,至法國政府業已就范,則又藐視中國,專擅行事。故曹總長與國務會議同人,均以為初非意料所及,頗不滿意。此次決議停交款項,不無影響。

庫使云:東省鐵路股東開會情形,本使未能預聞,致有種種誤會,實深負疚。並恨得知已晚,未早解釋,頃晤曹總長,當詳為解釋,並達歉忱。

Kudashev: For the various Allied ambassadors to issue a joint memorandum guaranteeing these payments – that would be a tall order. The ambassadors are all of the opinion that the payments can be made and this was previously made clear, so why is this additional measure now necessary?  I have appealed to the ambassadors many times over this matter and also feel that it has been excessive and embarrassing. Now that you have come up with a compromise solution, that the funds are to be placed in the Banks of China and Communications, could the expenses for the far eastern consulates be drawn on a monthly basis from these accounts? What is your opinion on this?

Lu: As for whether this is possible, this will also be discussed at the State Council meeting with Minister Cao. But what if a future, recognised Russian government – perhaps this same Bolshevik government – were to be of the opinion that the payments should not have been made to diplomatic and consular officials whom it has already dismissed, what then?

Kudashev: Your country has not yet recognised the Bolshevik government and, in future, no matter what kind of government is recognised, you may inform it that before recognition of the new government, the payments were made to representatives of the government that had been previously recognised. Is that not so? I have arranged to meet Minister Cao today at 5 o’clock to discuss this matter. Do you approve of my meeting him? If not, I can telephone to cancel it.

Lu: Your Excellency may certainly meet him.

Kudashev: I have heard that Minister Cao is dissatisfied with me over the issue of the CER shareholders’ meeting, is this correct?

Lu: Minister Cao is indeed dissatisfied and our colleagues on the State Council are all disappointed. [Jilin diplomatic representative] Fu Jiang was there to represent Guo [Zongxi] as chairman of the meeting, but the meeting elected another temporary chair to discuss all matters; this was an unexpected usurpation of authority and Fu could not utter a word. Then, before the agreed-upon measures had been publicised, the meeting continued in Beijing and gained the support of General Horvath. Horvath then suddenly returned to Harbin and the meeting was abortive. When French charge d’affaires [Damien] de Martel protested this, you discussed with our government a way to mediate it, such that the French government has now accepted the issue. Yet China was slighted and matters were conducted without proper authority. Thus, Minister Cao and our State Council colleagues are highly dissatisfied with this unexpected turn of events. It has had an influence on the current decision to stop the payments.

Kudashev: I was not privy to the circumstances surrounding the CER shareholders’ meeting, which has led to various misunderstandings and weighs on my conscience. I regret that I knew of it only too late and could not explain things earlier. Now that I will meet Minister Cao, I will explain everything in detail and express my apologies.

Dialogue between the Foreign Minister and Kudashev, 29 May 1918. Zhong-e guanxi shiliao, Minguo jiunian zhi banian (1917-1919). E zhengbian yu yiban jiaoshe (1), pp. 399-401.
rusasiabank
The Russo-Asiatic Bank in Shanghai, to which the Indemnity payments were made. Source.

Lu’s account of the shareholders’ meeting reveals the complex negotiations over its fate after November 1917. As much as Kudashev pleaded ignorance, Kolchak’s memoirs reveal him as one of the prime movers in the effort to reconstitute the Railway board as an anti-bolshevik government-in-exile. In so doing, he collided with both Chinese and French interests. The Chinese had ejected Bolshevik workers from the Railway zone in December, established an armed presence there and were keen to expand their influence. The majority of the Russo-Asiatic Bank’s capital stock was French. Since its Russian assets had been seized in the wake of the Revolution, the Bank needed both the Indemnity payments and the Railway to stay afloat, and the French did not take kindly to the Russians’ attempts to use the board for their own political ends. Martel complained about this in March but was despatched to Siberia for his pains.

China was eventually unsuccessful at this second attempt to sidestep the Indemnity. France and Japan furnished written statements guaranteeing the Indemnity payments in July; the next month, Beijing agreed to resume deposits with the Russo-Asiatic Bank. A new arrangement would have to wait until 1920, when both Allied and Chinese opinion  turned against Kudashev.

2 thoughts on “Evading the Boxer Indemnity, Part II

  1. Pingback: Evading the Boxer Indemnity – Shots Across the Amur 黑龍江對岸的槍聲

  2. Pingback: A Snapshot of the Chita Community, 1918 – Shots Across the Amur 黑龍江對岸的槍聲

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