The Madisonian. (Virginia City, Mont.) 1873-1915, 1895-04-27
HOW WILL SHE PAY?
CHINA OWES VICTORIOUS JAPAN AN
ENORMOUS WAR INDEMNITY

Should the Transfer Ee Made In Coin 1t
Would Upset the Money Markets of the
World-How France Reimbursed Ger
many After Sedan.
The whole world will be affected if
the government of Japan, in the conclu-
sion OF peace negotiations with China
decides to exact an indemnity in cash
The amount of the indemnity has been
generally stated at $3.50, 900, 900, and
the withdrawal Of this amount in gold
or silver from existing stocks of those
metals would affect the monetary system
OF nearly all the great civilized powers
in some degree and might even result in
changes in the price of commodities.
The Chinese empire possesses little
gold and silver and the actual currencv.
according to late report by young Mr.
DENLY. who was charge d 'affaires in the
absence OF his father, the minister. is
copper cash. Silver coins have only been
minted since May, 1889, and have not
yet gotten sufficiently into circulation
TO be regarded an even part of the cur
rency Of China. Gold is a commodity of
which the price varies with the London
market. This being the case, the Chinese
government would be Obliged to obtain
gold and silver to pay a war indemnity
by means Of foreign loans, and the metal
would have to be drawn largely from
the reserves of the great banks of Eu-
rope, from the treasury of the United
States, or, If silver were accepted, from
British India Japan has 10 desire to
see China resort to the European powers
for assistance, for it would have the ef-
feet Of giving them an influence in the
east which japan hopes to possess for
herself without foreign interference.
The Chinese government has already
considered the mortgage of their copper
mines to Germany and several similar
transactions which would increase Eu-
ropean influences in China, and Japan
will endeavor to avoid driving China to
such resources
The discussion of what might happen
If actual payment of a large indemnity
was required in coin or bullion is there
fore largely matter of theory, for
those familiar with japanese finances
do not believe that payment in actual
metal would be required. Payments in
coin or bullion play only a subordinate
part IN modern transfers of capital, and
the Japanese government would un-
doubtedly be satisfied with the transfer
OF bills OF exchange representing the |
amount OF the indemnity, even if it /
were nomirally stated in cash. The ac-
tual payment in cash would probably be
as injurious to Japan as to any other
nation, for it would double or treble her .
monetary circulation, and in the absence
OF the general use of checks, CONNER
clal bills and other instruments of cred
it would change the relation Of the
circulation to commodities,
upset prices and money values and in
vite speculation. If Japan decides to de-
mand an indemnity, the payment to be
completed within few years. she will
undoubtedly be satisfied with the man.
ner of payment adopted by France in
the settlement of her great indemnity
of 5000, OOO,O francs Isl, 200, OOO,-
OOO) to Germany after the Franco Prus-
sian war. This was the greatest transfer
Of capital ever made and seriously at.
fected the commercial relations and
money market in both countries, but the
of coin and bullion, both gold
and silver, which was transferred was
only about 500, 900, 900 francs ($1OO,-
900, OO0). The loss of coin and bullion,
therefore, was less than the loss of the
United States for the fiscal year 1898,
when the excess of exports of gold over
imports was $S7, 506, 463 and the excess
Of exports Of silver was $17, 544, ,O67.
The transfer of coin and bullion was a
bagatelle in comparison with the trans
fer of French capital by other MEANS -
Chicago Tribune