The herald., 1895-03-24
THE CHINESE INDEMNITY

The statement that the war between
| China and Japan is soon to come to an
end on the basis OF the payment OF an in
demnity of $3.50, 900. 600 to the Japanese
lacks positive confirmation, but the mere
mention of that sum has set the financial
authorities of the world to thinking.
| The war has advanced now to point
where its outcome seems reasonably easy
to fortell The Chinese will be defeated :
they are already defeated. Their vast
numbers will prove no protection to the
country, as under the loose and uncertain
form of government that prevails they are
not to be depended upon in times of diff
Guilty like the present 1t is only ques
tion of time when China must acknowl-
edge herself beaten and accept whatever
terms Japan is gracious enough to offer.
The Japanese war loan now amounts to
$500, 900, 600, every dollar of which came
from the people themselves. The pay
ment of an indemnity by China is a GER
tain fact and the amount will not be less
than $3.50 600. 600. If the war continues
another year it may be twice that
Where is this money to come from. and
in what sort of coin will it be paid?
These are the questions that European
financiers are discussing, and some phases
of the discussion bear on our own inter
ests. For China to attempt to wrench
such sum out of the people by direct
taxation would probably result in rebell-
ion and disruption of the ancient empire.
The Chinese are not patriotic like the
Japanese. and to meet such an obligation
OH top of all the expense of the war will
strain the resources of the country to
their utmost.
The mos practicable course for China
to pursue and the one she will probably
choose, will be to borrow the money
through the great brokers OF Europe. 1t
is said that this is what the Rothschilds
expect and what they are quietly making
preparations for So large loan has not
been placed since the close of the Franco
Prussian war, and the exact terms of its
payment will be watched for with a high
degree of interest.
1t has been generally assumed that be-
cause both China and Japan are silver
using countries the indemnity will be
paid in that metal and the New York
Worlds financial article attributes the re-
cent advance of the price of silver to that
fact. In case Japan demands silver there
will be lively demand for the metal all
over the world, its price will advance and
better times will come to pass in the
United States. If on the other hand
Japan should require the indemnity paid
in gold-which is not improbable as the
plucky little island may intend to start
war gold chest after the manner of the
European countries-there will be a gen.
eral scramble after all the gold in sight in
Europe and our own reserve will be
raided more violently than ever before.
1t is undoubtedly great convenience to
European fnanciers to nave a mine of
free gold that they can tap whenever they
please as they can our reserve. The eyes
of Europe rest greedily upon that pile of
one hundred millions. When it falls be-
low a certain point it must be re pleIiished
to maintain the nations credit, and the
supply is limitless as long as the country
can continue to mortgage itself and bor-
row gold with which to replace all that
is drained away. If China is to pay her
indemnity in gold the United States,
through this anomalous and inconceivable
absurdity of an open till, must supply
large part of what is needed. If our re-
serve fails to supply all that is needed we
shall be called upon to borrow more from
all over tle world at whatever sacrifice
may be necessary, in order that the de-
ticiency may be supplied.
1t is to be hoped that if the worst is des-
tined to happen and our country is to
be called upon to mortgage itself still
more in order to pay the debts of war
of haf-civilzed nations on the other
side of the globe it may result in radi-
cal change in the system which allows