Evening star. [volume] (Washington, D.C.) 1854-1972, 1901-06-04
Modus Vivendi Proposed on the
Chinese Indemnity.
PLAN As TO METHOD OF PAYING
Russia Suggests That Powers
Jointly Guarantee the Bonds.
THIS COUNTRY OBJECTS S

ject of the Chinese indemnities is re-
ceiving the earnest attention of those in
terested in the Chinese negotiations. The
purpose is to prevent this Indemnity ques-
tion from causing any interruption in the
concert of the powers, and at the same
time to remove the indemnity issue itself
so that progress can be made on the re-
manning subjects Of negotiations. Chief of
these is the conclusion of permanent trea-
ties between China and the several powers
The question over the indemnity arose dur
ing the Presidents western trip, but since
the return of the President and Secretary
Hay it has been taken up anew and thor
oughly gone over with the foreign repre-
sentatives chiefly concerned, Including the
British, Russian and French amba ssadors
and the Japanese minister.
1t is because of the Importance attached
to these negotiations that several of the
ambassadors, who had intended to leave
for Europe. have now deferred their de-
exchanges of the last few days the ques-
tion has resolved itself to about the fol-
lowing basis:
Proposed Guarantee of Bonds.
There is no further issue as to the total
of indemnity, that being agreed upon by
all the powers at 1897 100000. But there
remains the question of how this sS37 OO0,-
GOO shall be paid. The Russian suggestion,
which appears to have the approval of a
majority of the powers, is that China issue
bonds for the full amount, on guarantee of
payment of the bonds.
The British Plan.
The British government is one of those
not favorable to the Russian proposition,
and the British view has taken form in a
plan to have China issue her own bonds to
the several governments for the amount
due to each. each government thereafter
adopting it's own course as to an individual
guarantee.
The policy of the United States concern
ing the Russian proposition was in part
made known during the Presidents western
trip, although the final course of this gov
ernment is still considered Open and is the
subject of recent extended conferences be-
tween the ambassadors and Secretary Hay
since the latter's return. The chief diff
Guilty which the United States finds to
joint guarantee is that the Constitution does
not authorize the executive to guarantee
bonds in the absence of the approval of
Congress.
In behalf of this plan 1t is being urged
that If China is left alone to Iiqudate such
an enormous issue of bonds, covering a 40
year period. which is the time generally
accepted as the life of the bonds, there
will be defaults and difficulties constantly
arising, whereas guaranteed bonds will at
once remove the entire subject of indem-
mites from the realm of delay and future
complication. This view. it is stated in
ton. has been favorably received by ma
jority of the powers. But the desire has
been not only to secure the assent of a ma
Jority Of the powers, but the unanimous
approval of all of them. This however
has not been accomplished up to the pres
ent time, and 1t Is for this reason that the
modus vivend is now being considered as
n possible means of bringing about united
action.
AS to the attitude of Congress, it has
been stated that much doubt existed as TO
whether the legislative branch would ap-
prove joint guarantee of such vast total
of bonds Moreover, the American view
has been that 4 per cent bonds as con-
templated by Russia, would not be pru-
dent investment for the United States.
since the United States readily sells bonds
at 2la per cent, whereas Russian per cent
securities sell at discount of 90 cents on
the dollar.
The Proposed MOdus Vivendf.
1t is in view Of these complications that
the idea is now suggested Of a modus Vi
vendi, by which the views of all the powers
can be harmOnized, and concerted action
maintained.
From the Russian standpoint 1t would
not suffice for majority Of the powers to
unite in a guarantee of the bonds as it Is
of prime Importance to continue the unan-
imous concert of he powers on this and all
other questions. What this middle ground
can be is not disclosed although It was
stated today with considerable confidence
that the prospects of middle ground were
most hopeful.
When this indemnity issue is settled it is
believed that fully so per cent of the Chi
nese negotiations will be disposed of. The
next question Will be permanent treaties
with China, and it is expected that each of
the powers will suggest certain bases Of
a treaty and that these will ultimately
take shape In common form of treaty