The St. Louis Republic. [volume] (St. Louis, Mo.) 1888-1919, 1903-08-22
Excessive Rate of Exchange Said
to Have Been Assessed by Fis-
cal Agents at Shanghai.
JAPAN JOINS THE INQUIRY.
No Fraud Suspected, but Exorbi-
tant Charges Alleged to Have
Caused Heavy Loss in
Boxer Award.

REPUBLIC SPECIAL
Washington. Aug. 21.-Rigid Investigation
Of the whole system of payment of the Chi
neSe indemnity to the Powers will be un-
dertaken at once by the United States Gov
eminent
Fearing that this country is not getting
its Just dues the State Department has re-
quested the loan Of two financial experts
from the Treasury Department Secretary
Shaw. who himself is engaged in a serious
controversy with the International Bank
ing Corporation Of New York. which is
the American fiscal agent In China, has
decided to place William P. Armstrong of
the Office Of the Auditor for the State De-
partment, and Joseph 8. Mccoy, Treasury
Department actuary, at the disposal Of the
Secretary of State.
They will 60 to China within the next
few weeks and inquire into every detail Of
the methods by which the annual and semi
annual amortization and interest INSTALL
ments Of the Boxer indemnity fund are paid
and handled by the International Bankers'
Commission at Shanghai
The Treasury Department and the Inter.
national Banking Corporation are arrayed
against each other on the question Of the
rate Of exchange on the indemnity payment
made on July /. 1902 for the period from
July ], to December 81, 1901
The International Banking Commission At
ShaghM whose duty it is to receive the In
demnity instailments from the Chinese Gov.
which is James 8 Fearon, decided that the
rate Of exchange should be 6sh cents per
hatkwan tael. The standard Of payment Of
the indemnity Is the haikwan tael
ILLEGAL RATES ALLEGED.
he nnv rtr opfh oIH a. %hoH
was an arbitrary and unauthoritative ac-
ing Commission, especially in view Of the
fact that the rate Of exchange 9uo,ed in
London and in New York, and in the state
ment Of the Treasurer Of the United States
taeL The Treasury Department computed
the indemnity on the basis Of the latter
rate Of exchange.
The United States bond with the Inter-
national Banking Corporation provides
that this corporation shall collect the In
Se sao n fne
this service one-haH Of ] per cent Of all
moneys handled. Tho International Bank
81 eaehsnss ss ss
tional Bankers Commission, and therefore
It pronered to the United States a sum
$1,626.0 less than that which the Treasury
States.
;. Secretary Shaw is. convinced that the 40
sion at Shanghai is Illegal. The depart
ment proposes the International Banking
Corporation shall make good this shortage.
Bankers Commission at the time Of the an
nuai payment. January 1 lSos. and the
semiannual payment, July I. 1s@. is not be-
ment, which intends to settle which is to
govern, the London and New York price Of
silver. considered the worlds price. or the
change fixed by the Bankers Commission
at Shanghai
years before the $50. 900 taels is dis
charged the United States will receive
probably several hundred thousand dollars
less than II the world market rate Of e1-
change prevailed.
This question Of rate Of exchange Is close
ly allied with other features Of the indem-
nifty payment question, which the State De-
partment for months has been DESTROYS
should be investigated by financial experts
like Mr.. Armstrong and Mr.. Mccoy. When
Secretary Shaw returned to Washington to-
day he decided on Messrs. Armstrong and
Mccoy for thine work. provided they can
- ~ JAPAN Is DrsPLEAsED.
Great Britain and Japan 1t is understood
on the highest authority: are dissatisfied at
co es in fixine the rate o. eachanse
lower than that prevailing in those, two
countries and the United States. That they
lave decided on investigations similar to
that proposed by the United States Is prac-
dcally certain.
The result, 1t is confidently believed by
many here. will be strict adherence here
! after to the world-market rate Of exchange.
The United States. England and Japan have
/ influence enough to carry this point, espe-
cially as it will mean gain instead Of loss
for China's other creditors-Russia, Ger
many. France, Holland, Austria Hungary.
Italy. Belgium and Spain.
There is no suspicion expressed on tho
part of any Government official here that
there is any attempt at fraud. The situa-
ton between the Treasury Department and
tho International Banking Corporation is
Mr.. Armstrong and Mr.. Mccoy will also
! look into the question Of whether the in
| demnity should be paid in gold or silver.
Government has already declared its inten-
ton that the indemnity shall be paid in sill
yer. Their reports Will doubtless be the ba-
Sis Tor international negotiations REGARDING
the methods Of payment. and there is a DOS
] sibility of revision Of the existing sysfern