§ Action taken by other Powers.
United States of America.
By President's Executive Order of December, 1908, nearly one-half of the original Indemnity is returned to the Chinese Government after payment for the maintenance of Tsinghua College and its allied activities (i.e., scholarships for Chinese in the United States of America). In 1924, by an Act of Congress, the United States Government decided to remit the remaining balance as from 1st October, 1917, to be applied, at the discretion of the President, to educational and cultural purposes. President's Executive Order was issued on 16th July, 1925, and a Board consisting of 10 Chinese and five United States citizens was created to administer the funds, which are spent partly in China and partly in the United States of America.
By the Japanese law promulgated on 30th March, 1923, the balance of the Indemnity was definitely set aside for joint cultural and educational objects. It was proposed to devote one-half to immediate objects and the other half to the formation of a sinking fund, the interest from which will be available later on for a permanent endowment. Control of the funds is vested in a special Bureau of Cultural Works functioning under the Japanese Foreign Office; but there is also a central consultative committee in China with a maximum membership of 21, 11 of whom are Chinese.
By agreement signed on 12th April, 1925, between the Chinese Government (Peking) and the French Government, the total amount due every month on account of the French Indemnity is paid to a body now known as the Banque Franco-Chinoise pour le commerce et l'industrie. The money is then used for the service of the 5 per cent. Gold Dollar Loan raised in 1925, redeemable in 23 years, the bonds of which were handed to the Far Eastern creditors of the former Banque Industrielle. Under the 1925 arrangement a small percentage of the total indemnity was to be paid over in grants to Sino-French educational or philanthropic institutions.
An arrangement was reached on 8th December, 1927, by which monthly instalments of the Indemnity payable from April, 1928, were to be used for the following purposes:
75 per cent. to be devoted to railway construction and improvement in China;
25 per cent. to be dispensed by a Sino-Belgian Commission for education and philanthropic purposes. Further details are given in "The China Year Book 1929–30," pp. 668–9, where it is stated that the railway material was to be purchased in Belgium.
By an agreement reached between the Italian and Chinese (Peking) Governments on 1st October, 1925, it was decided in principle that a Sino-Italian Indemnity Commission was to administer the outstanding balance of the Indemnity and was to apply it to works of education and philanthropy, as well as to enterprises of public utility for which the materials were to be purchased in Italy.
No arrangement has yet been made, but a proposal for conservancy work has been put forward.
When China entered the War in 1917, Russia deferred insisting on payment of one-third of her total annual Indemnity. In 1920 the other two-thirds was devoted by the Chinese Government to repayment of bank advances and later to the redemption service of certain Chinese domestic loans. From 1922 the "deferred" balance was also pledged as security for a loan and also for note issues to finance the upkeep of China's diplomatic and consular services, and the current expenses of certain Government educational institutions in Peking. The validity of these and subsequent dispositions was recognised by a declaration appended to the agreement between the Republic of China and the Union of Soviet Socialist Republics of 31st May, 1924. By this declaration a special com mission, consisting of two Chinese and one Soviet citizen, was to be appointed to allocate and administer, for the promotion of education among the Chinese,
the funds available from the waived Indemnity after all prior obligations have been satisfied.
The only Indemnities which are still payable on the original lines are those for Spain, Portugal, Sweden and Norway; but these are insignificant in amount.