Volume 18 — CHINESE INDEMNITY FUND.

Report in the Senate, of the Committee on Foreign Relations, June 24, 1870.

The Committee on Foreign Relations, to whom was referred the message of the President of March 10, 1870, covering a report of the Secretary of State and correspondence concerning the Chinese Indemnity Fund, also certain petitions on the same subject, have had the same under consideration, and beg leave to report.

The origin and history of the Chinese Indemnity Fund are found in authentic documents, so that little need be done except to state the case from these authorities.

The British and French expeditions of 1858, which, after capturing Canton, turned their combined forces toward Peking, and ascended the Pei-ho as far as Tien-tsin, opened the way to the presentation of claims of our citizens, which were promptly recognized by the Chinese Government. Though taking no part in the war, our people profited by the result. The convention that ensued was born of the war.

THE CONVENTION AND PAYMENT OF CLAIMS.

Claims were brought forward amounting to more than one and a quarter million of dollars; but Mr. Reed, our Minister in China, concluded, after examination, that 600,000 taels, or about $840,000, was a proper estimate for all rightfully due. Accordingly he entered into an arrangement with the Chinese plenipotentiaries for their prospective liquidation. At first there was nothing but an agreement in correspondence, being a sort of executory contract, which was unsatisfactory in form, incomplete in stipulations, and embarrassed by the condition that in the adjudication of the claims a Chinese officer should take part. All this involved delay, at least, if not more. At last this agreement was embodied in the terms of a convention between the two governments, dispensing with Chinese coöperation, and the amount of damages was reduced to 500,000 taels, to be paid from the maritime revenues of Shanghai, Foo-chow, and Canton, in complete discharge of all demands.[111]

The original agreement was at Tien-tsin, where the Chinese met the British, French, and Russian negotiators; but the convention was finally executed at Shanghai, November 8, 1858. The statement already made appears in the terms of the convention. After setting forth that certain maritime revenues were pledged for the payment of American claims, “to an amount not exceeding 600,000 taels,” the convention proceeds to declare, “And the plenipotentiary of the United States, actuated by a friendly feeling towards China, is willing, on behalf of the United States, to reduce the amount needed for such claims to an aggregate of 500,000 taels”; and then it is agreed “that this amount shall be in full liquidation of all claims of American citizens at the various ports to this date.”[112]

Mr. Reed, in communicating this treaty to the Department of State, says, under date of November 10, 1858:—

“Nor has there been any great difficulty in effecting it, the Chinese plenipotentiaries showing no disposition to evade the agreement they had entered into at Tien-tsin, and being quite willing to arrange the details on reasonable grounds.”[113]

The Minister then proceeds to say, that his first duty—“not the less binding because to the Chinese”—was to revise the claims themselves, and ascertain whether, after giving credit for such as had in the mean time been settled and paid, and applying some clear principle of law, the aggregate could not be reduced; and he adds, that “the amount assumed at Tien-tsin was an arbitrary one.” In order to arrive at a more precise result, he called upon the claimants for a revised statement of their demands. In many instances the requisition was complied with; in others it was made the occasion for “all sorts of speculative and contingent claims,—such, for example, as a vice-consul asking to be remunerated for fees that he might have made, and the captain of a steamer claiming the profits of a year to come.” Notwithstanding these instances the claims were revised in a proper spirit, and were sensibly reduced by the claimants themselves. Still there were many of a contingent character. On a careful review of all the evidence before him, the Minister was satisfied that he could materially reduce the amount to be demanded, which was accordingly done. In the draught of the convention first submitted to the Commissioners at Shanghai, the amount stated was 525,000 taels, with a provision, that, in case of excess beyond the claims and interest, it should be refunded to the Chinese Government; on which the Minister remarks: “They preferred, however, the small sum without such provision, evidently thinking it was their best policy to get rid of the matter forever.”[114] The language of the Commissioners was:—

“We acknowledge the consideration and kindness of your Excellency in this matter, in that you have, of your own accord, reduced the first amount of claims, and now place the total at 525,000 taels. We have taken the matter into full consultation, and propose, that, if a further reduction of 25,000 taels be made, fixing the total amount at 500,000 taels, then custom-house certificates can be issued at Canton, Shanghai, and Foo-chow, dating from the first day of our next year, (February 3, 1859,) which can be successively applied to the gradual payment of the entire sum.”[115]

These terms were embodied in the final convention between the parties.

After this exposition, the Minister declares that the convention, if ratified by our Government, and carried into execution by the Chinese, as he did not doubt it would be, would liquidate every claim on China by citizens of the United States, principal and Chinese interest at twelve per cent. per annum, on most of the claims for three years, and for a longer period on others, among which was one as ancient as 1847, which had occupied the attention and excited the sympathies of many of his predecessors.

The Minister appends a tabular statement of claims, with a list of what he calls “Claims Suspended,” among which is one known as “The Caldera,” to which reference will be made hereafter. He then says:—

“A sufficient sum can be reserved to cover these claims, all of which are more or less doubtful.”

And adds:—

“If they be recognized, and the principle of paying interest be adopted throughout, the fund will be exhausted. If they be disallowed, though interest be paid to all the other claimants, there will be a surplus at the disposition of the Government.”[116]

Thus early was there anticipation of a surplus.

At the same time the Minister suggested that Congress should provide for the adjudication of the claims and a dividend among claimants. This was done by the Act of March 3, 1859, entitled “An Act to carry into effect the Convention between the United States and China, concluded on the 8th of November, 1858, at Shanghai,”[117] authorizing the appointment of commissioners “to receive and examine all claims which may be presented to them under the said convention, according to the provisions of the same, the principles of justice and International Law,”—and further providing “that the said commissioners shall report to the chief diplomatic officer in China the several awards made by them, to be approved by him,” which are to be paid out of the revenues set apart for this purpose, in ratable proportion, “according to the direction of the said diplomatic officer.”

The examination of the claims was completed in January, 1860, and the payments directed by the Commissioners were duly made. Then occurred a condition of things almost without precedent in the relations of nations. After all the payments directed by the Commissioners, a large surplus was found in the custody of the legation at Peking, which was subsequently transferred to the United States. This surplus, with accumulations of interest and gain by exchange, less an amount paid under authority of an Act of Congress approved February 22, 1869,[118] has been invested in Ten-Forty bonds, which are now held by the State Department, amounting at par to $386,000. Another amount of $206.87 in cash is also in the possession of the Department; and about $2,000 remain in the custody of the Minister to China, who has been directed to make remittance of the same.[119]

The Secretary of State, in his Report on this subject, as late as March 10, 1870, says that he “is not aware of any claims against this fund which have not been considered by the Commissioners and determined by them.”[120]

PROPOSITIONS WITH REGARD TO SURPLUS.

This surplus has been the subject of discussion for more than a decade of years. During all this time it has been before Congress without any definitive action. As long ago as December, 1860, it was thus noticed by President Buchanan in his Annual Message:—

“After the awards shall have been satisfied, there will remain a surplus of more than $200,000 at the disposition of Congress. As this will in equity belong to the Chinese Government, would not justice require its appropriation to some benevolent object in which the Chinese may be specially interested?”[121]

Nothing was done by Congress, and President Lincoln, in his Annual Message of December, 1861, thus followed in the footsteps of his predecessor:—

“I repeat the recommendation of my predecessor, in his Annual Message to Congress in December last, in regard to the disposition of the surplus which will probably remain after satisfying the claims of American citizens against China, pursuant to the awards of the Commissioners under the Act of the 3d of March, 1859. If, however, it should not be deemed advisable to carry that recommendation into effect, I would suggest that authority be given for investing the principal, over the proceeds of the surplus referred to, in good securities, with a view to the satisfaction of such other just claims of our citizens against China as are not unlikely to arise hereafter in the course of our extensive trade with that empire.”[122]

The subject was at this time considered by the Committee on Foreign Relations, aided by the Secretary of State, who laid before the Committee all the original papers relating to the proceedings of the Commissioners. In a communication to the Committee,[123] Mr. Seward stated the case as he understood it, recognizing “the refunding of the whole amount to the Chinese” as one of the methods which “suggest themselves.” This was in the summer of 1862, at the most critical period of the war for the suppression of the Rebellion, and the Committee did not feel disposed at that time to make any recommendation with regard to the fund.

Meanwhile the disposition of this fund was discussed elsewhere. Our distinguished representative in China, Mr. Burlingame, entered upon it with characteristic ardor. Regarding the fund as essentially Chinese in character, if not belonging in equity to China, he urged that it should be devoted to the foundation of an institution of learning at Peking, which he proposed to call The American College, or Ta-Mei Kwoh Hioh-kung: first, to teach Americans the language and literature of China, so as to fit them to be interpreters and consuls; and, secondly, to educate Chinese in English studies and in their own literature, with a view to employment by their own rulers or by the United States. The usefulness and practicability of such a college were developed in two elaborate dispatches,—one bearing date Shanghai, May 19, 1862,[124] and the other, Peking, November 18, 1863,[125] in the course of which Mr. Burlingame said that he was “disposed to urge the adoption of this proposal more with a reference to the benefit such a college would be to the Chinese than to ourselves.”[126] Not content with thus declaring his desire to make this fund of benefit to them, he says, “In equity the balance appears to belong to the Chinese, but they have no voice in its disposal.”[127] His eloquent appeal has thus far been without effect. Nothing has been done to carry out his recommendation, and the question still remains, What to do with the fund?

It is sometimes proposed that this fund should be reserved for the satisfaction of possible claims hereafter. But this would be contrary to the terms of the convention, which expressly provides for the “claims of American citizens at the various ports to this date,”—thus positively limiting the disposition of the fund. Mr. Burlingame, without referring to the terms of the convention, objected to any such reservation as calculated to produce embarrassment in our relations with China. According to him, “it would be preferable to return the whole to them, or distribute the money, as it accrues, to the disappointed claimants, and those Chinese in the employ of our citizens who suffered severe losses in consequence of their connection with them, than to lay it aside for future contingencies to settle with a government like the Chinese.”[128] His authority on this proposition may be considered decisive.

But there is another consideration which leads to the same conclusion. Any retention of the fund to meet possible future claims is a plain recognition of the interest, if not the proprietorship of China; and since there is no authority under the convention for its application to possible future claims, it will be at least questionable whether the Chinese Government should not have a voice in the adjudication of such claims. At all events, we shall assume a peculiar responsibility, if we undertake to apply this fund to claims not contemplated by the convention. Nor is there any reason of expediency which can justify such an assumption on our part. China has evinced no disposition to be otherwise than just to American citizens. Although twelve years have elapsed since the date of the convention, there are no outstanding claims against China which have received the sympathy of our Government. Should any such claims arise, it were far better that they should be presented directly, and be satisfied by an award in their favor. Meanwhile the old account should be closed.

A remark of Mr. Burlingame, already quoted, requires one word of comment. He mentions, as a possible course, the distribution of the fund among “disappointed claimants, and those Chinese in the employ of our citizens who suffered severe losses in consequence of their connection with them.” Of the Chinese mentioned the Committee know nothing. No claims in their behalf have been presented. But since the award of the Commissioners three different cases have occurred, coming under the head of “Disappointed Claimants.” The disposition of these is mentioned at the end of this Report.[129] It does not seem advisable that the fund should be kept to meet such applications. The awards of the Commissioners have been approved by our Minister in China, and the proceedings closed. If they were opened in the case of the Neva, it was because the claimants there had not been heard in China. It is not supposed that any other occasion can arise to open these proceedings. The fund in question cannot be regarded as a charity or largess for the gratification of “disappointed claimants,” nor would it be proper for the United States to play such a generous part at the expense of China.

Our country has no house for its legation at Peking or for its consulates in other places, nor does it possess any buildings in China which it might use as courthouse or jail; and latterly there has been a strong disposition to apply this fund in this direction. Mr. Seward seems to have inclined this way, as appears from his Report to Congress,[130] and Mr. Fish also, as appears from his Report to Congress.[131] But this disposition proceeds on the admission that the fund differs materially from other moneys of the United States,—that, if it does not belong to China, it bears the Chinese earmark so strongly that it cannot be treated as belonging to our national assets. In point of fact, all attempts to cover it into the Treasury have proved unsuccessful.

Petitions from opposite quarters with regard to the disposition of the fund attest a prevailing interest.

At a meeting of citizens in New York, March 11, 1870, a distinguished committee was appointed, with Isaac Ferris, Chancellor of the University, as chairman, with whom as associates were William E. Dodge, President of the Chamber of Commerce, Frederick S. Winston, E. D. Morgan, E. C. Benedict, A. A. Low, John C. Green, James H. Taft, Stewart Brown, and William P. Jones, many of them having large interests in China, who adopted resolutions on this subject to be forwarded to Congress. The first resolution declares,—

“That this Committee is of opinion that the surplus of the Indemnity Fund received from the Chinese under the Convention of 1858, referred to in the Annual Message of President Buchanan to the Second Session of the Thirty-Sixth Congress, and of President Lincoln to the Second Session of the Thirty-Seventh Congress, with the accumulation thereon, certainly does belong in equity to the Chinese Government, as the Presidents therein declare, and should be returned to it.”

The Committee then proceed to say, that, if such surplus shall be declined by China, it should be expended, according to the recommendation of Mr. Burlingame, in founding a literary institution for the equal benefit of Chinese and Americans.

Chicago responded to New York. At a meeting of citizens March 31st, another committee was organized, with R. B. Mason, the Mayor, as chairman,—and among the members were William Bross, Lieutenant-Governor of Illinois, Thomas Drummond, Judge of the United States Circuit Court, James E. McLean, Collector of Customs, N. S. Davis, Professor of Surgery in the Medical College, Samuel M. Wiseman, President of the First National Bank, J. C. Burroughs, President of the University of Chicago, and E. D. Haven, President of the Northwestern University, with others,—and adopted resolutions, where, after approving those of New York, they declare,—

“That it seems to us eminently fitting and fortunate that this money, which distinguished representatives of the United States have asserted belongs in equity to the Chinese Government, though that government is disposed to waive its right to it, should be employed in some way to the common advantage and honor of both nations.”

The committee then proceed to resolve further,—

“That in view of the impression conveyed by Secretary Seward’s Report to the Third Session of the Fortieth Congress, that the Chinese authorities are unwilling to receive this money, this Committee respectfully memorializes Congress to cover it into the United States Treasury as a special fund, to be returned to the Chinese Treasury, or hereafter appropriated to the establishment of the proposed institution of learning at Peking, as the Chinese Government may elect.”

These two weighty committees concur in recognizing the equity of China, if not her proprietorship, in this fund. If it be true that the surplus belongs to China, or that it is hers in equity, it will be difficult to defend any proposition to return the amount indirectly, as in a college or buildings for the accommodation of the United States on Chinese soil. If returned at all, it must be directly, and in the form of money. What right have we to determine how to expend in China or for China that which is hers? To do so would not be generous, even if it were just. It would be ostentatious, and might be offensive. It would assume that we can employ the money of China, even in China, for her own benefit, better than she can herself. At all events, it would recognize an undefined title in China, to which we deferred.

THE CHINESE HAVE NOT REFUSED TO RECEIVE IT.

But it cannot be disguised, that, when the two Secretaries of State concurred in the idea of appropriating this fund to the erection of buildings, also when Mr. Burlingame made his earnest effort for its appropriation to a college at Peking, and when two successive Presidents invited Congress to consider what should be done with it, there was an impression not only that the Chinese would not allow the surplus to be returned, but that they had peremptorily declined to entertain the proposition. Such was the impression when the attention of the Committee was first called to this fund, now many years ago. And it cannot be doubted that this impression has exercised an influence in preventing frank and explicit action on the question, according to the obvious requirement of justice.

The Committee have endeavored to ascertain the ground for the statement that the Chinese had refused to receive the surplus. It seems, on inquiry, to be a report or rumor started nobody knows precisely how or when. Thus we find Mr. Seward saying, in his Report of February 18, 1868:—

“It appears, that, when it was ascertained that this surplus would remain, the return of it to the Chinese Government was proposed, but that they declined to accept it.”[132]

And Mr. Fish, in a similar Report, under date of March 10, 1870, says likewise:—

“The Secretary of State is informed, that, after the awards were completed, and it was definitely known that there would be a surplus, Mr. Burlingame informally proposed to return whatever should be left. The Chinese, however, did not seem disposed to accept it.”[133]

But these distinguished Secretaries do not adduce any authority for their assertion; nor does careful search at the State Department disclose any dispatch or record sustaining or justifying it. On this point the Committee are confident. No instruction was ever given to any Minister authorizing him to tender a return of the surplus, or even to sound the Chinese Government on the question of receiving it, if tendered. In fact, no power exists in the State Department to authorize such a tender. Such an act could proceed only from Congress, which has never acted on the subject.

The Committee, therefore, dismiss the assumption that there has been any tender to the Chinese, or any refusal on their part, whether formal or informal, and they approach the question simply on its merits.

DUTY TO CHINA.

Had this question arisen in our relations with a European power, it would be only according to an important precedent, if we forbore to open the transaction. By two separate conventions, one in 1815 and the other in 1818, France paid to England a large sum, amounting to one hundred and thirty million francs, on account of English claimants, and the English Government undertook to dispose of all their claims, as the United States undertook to dispose of all the claims of American citizens in China. In 1852 Lord Lyndhurst brought the subject before the House of Lords, when he stated that there was “an unapplied balance of upwards of £200,000”;[134] and in 1861 Mr. Denman did the same in the House of Commons, when he said, that, “after all claims had been satisfied, there still remained a sum of £200,000 not in any way to be considered due under the convention.”[135] Nothing was said of returning this surplus to France. The Baron de Bode, a renowned litigant, made an ineffectual attempt to obtain something out of it on account of losses in France, although his case was argued with consummate ability in the English courts, and awakened the eloquence of Lord Lyndhurst in the House of Lords. In an appeal for justice, the Baron declares that out of the amount received by England, only 67,071,301 francs had been paid to claimants, and he insists that the Crown should account to the claimants, or to France, for the unexpended surplus,—thus recognizing an eventual proprietorship in France, after the satisfaction of the claims.[136] What has been done with this surplus since is not known.

But while the importance of doing equity always is a paramount duty, the Committee feel that there is something in the negotiation under which this surplus accrued which should make us particularly careful lest we fail to do equity. It will be observed that the sum received from China was on account of certain claims of our citizens, and that it was in no sense a national indemnity; in other words, the consideration was specific, and not general in character. The preamble of the convention recites that it was entered into “for the satisfaction of claims of American citizens,”—thus expressly excluding any other consideration. With regard to these claims the Chinese had little or no information, while our Minister saw clearly, that, with the disallowance of those doubtful, which he regarded as probable, there would be a surplus. His words were: “If they be recognized, the fund will be exhausted. If they be disallowed, there will be a surplus at the disposition of the Government.”[137] The actual surplus was about thirty-three and a third per cent. of the amount stipulated, and about fifty per cent. of the amount awarded to claimants. The considerableness of this sum is another reason why we should hesitate to take advantage of a transaction where we were so situated as to be the best informed on the matter in issue. If we did not know everything bearing on it, we knew much more than the Chinese.

In fact, the Chinese acted in the dark; and here we have the testimony of Mr. Williams, the interpreter of our Minister in the negotiation, and still an honored servant of the Government, who has said in a dispatch: “No list was presented to the Chinese by Mr. Reed”; and again, “The United States Government was made the sole judge of the justice of the claims”; and then again, “In reality, they [the Chinese] paid the demands made upon them by the English and French Ministers, as well as the American, under pressure.”[138] If this were so,—and one of our own officers is the witness,—the equity of the Chinese becomes more apparent. Obviously, they were unable to examine the claims, and did not pretend to examine them. Everything was left to the United States. And this was done while the ancient empire was torn by civil war, aggravated by the menacing attitudes of England and France. It is not too much to say that it was done “under pressure.” According to well-known authorities, a deed made under duress may be set aside; and this rule of jurisprudence shows a just sensitiveness with regard to that absolute freedom which is essential to the life of a contract. Such a rule, if applied in the intercourse of nations, would invalidate most of those conventions after war or menace by which one power has assumed obligations to another, and, indeed, would strike at war and menace as modes of pursuing a claim. In the present case the validity of the convention is not called in question; but, since we assert no right of conquest, it is properly suggested that the original pressure upon China, attested by one of our own functionaries, peculiarly intimate with the transaction, is an additional reason why we should decline to take advantage of the convention beyond the just satisfaction of our citizens.

And this brings the Committee to the conclusion, that, in equity, this fund does not belong to us. Whatever may be our technical title, in conscience the money is not ours.

In returning to China the fund in question and its accretions, the United States will relieve themselves of an embarrassing trust, while they render unto the distant Cæsar what is his own, and set an example by which republican institutions will be elevated. The question of its application, which has occupied the attention of successive Presidents, which has been presented to successive Congresses, and is still undecided, will be at rest. Schemes for the bestowal of the fund in such a way as to harmonize our sense of justice with our obligations to China, if not with Chinese proprietorship, will cease. There will be nothing for “disappointed claimants” to pursue. China will receive her own,—if with astonishment, it will be only because nations have so rarely lived according to the Golden Rule. Such an act cannot be otherwise than honorable to the United States. It will be a victory in a new field, making us first in a new order of conquerors. China, with infinite resources, will be more than ever open to American enterprise. Thus, while doing right, shall we benefit ourselves. So is justice to others the way to national advantage. But whatever this advantage, it must not be forgotten that the first inducement is the essential equity of the case.

The measure now proposed will be valuable in proportion as it is spontaneous. Thus far China has made no demand, or suggestion even. A year hence the venerable Empire may appear before the youthful Republic with a formal claim. The very fact that we deliberate about this fund will spread the tidings of its existence. Better anticipate a demand than wait and at last yield an ungracious compliance, urged by a foreign plenipotentiary in the service of the ancient government whose money is now in our hands.

The Report was accompanied by the following Joint Resolution, which was read and passed to a second reading:—

JOINT RESOLUTION, DIRECTING THE RETURN OF CERTAIN MONEYS TO THE GOVERNMENT OF CHINA.

Whereas on the 8th day of November, 1858, a convention was entered into between the United States and China for the settlement of claims against the latter by citizens of the United States, and in pursuance thereof an amount of five hundred thousand taels, making seven hundred thousand dollars in gold, or thereabouts, was paid by China, out of which sum, after the satisfaction of all claims exhibited by citizens of the United States, there remains in the hands of the United States an unappropriated surplus, amounting, with interest and exchange, to four hundred thousand dollars in currency, or thereabouts, which sum is now in custody of the Department of State: Now, therefore,

Be it resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That the unappropriated surplus now in the hands of the United States, under the convention with China, of November 8, 1858, be refunded to the Government of China; and it shall be the duty of the President of the United States to see that this is carried into effect.

APPENDIX.

(A). Page 121. LETTER OF MR. SEWARD TO MR. SUMNER.

Department of State, Washington, June 21, 1862.

Sir,—I duly received your letter of the 3d instant, accompanied by a copy of the resolution of the Senate of the 2d instant, referring to the consideration of the Committee on Foreign Relations of that part of the President’s Annual Message to Congress, of December last, which adverts to the difference between the amount stipulated to be paid by China in satisfaction of claims of United States citizens and the gross amount of the awards of the Commissioners appointed pursuant to the Act of Congress of the 3d of March, 1859.

In compliance with your request for information and suggestion upon the subject, I have the honor to communicate a copy of the Convention, a copy of the Act to carry it into effect, a copy of all the correspondence on record or on file in the Department touching the matter, and all the original papers relating to the proceedings of the Commissioners. It is desirable that great care should be taken of these last, and that they should be returned to the Department as soon as the subject shall have been disposed of.

The circumstance of the complaints against the Chinese, which it was the purpose of the convention to adjust, having arisen in a peculiar region and among a singular people, probably suggested the appointment of Commissioners resident on the spot, who were familiar with the scene of their duties. It is understood, therefore, that, upon the recommendation of Mr. Reed, the Minister who concluded the convention, Mr. Charles W. Bradley, who was United States Consul at Ning-po, and Mr. Oliver E. Roberts, who had acted in a similar capacity elsewhere in China, and both of whom had long resided in that country, were appointed Commissioners. The business-like manner in which they discharged their trust is manifest from the records of the Commission.

With regard to the disposition of the surplus in question, three methods suggest themselves.

1. The refunding of the whole amount to the Chinese.

2. Appropriating the whole or a part of it in payment of claims supposed to have been unjustly rejected by the Commissioners, and of others in which the amounts allowed may not have been satisfactory to the claimants.

3. Retaining the whole surplus in the Treasury of the United States, or causing it to be invested toward indemnifying citizens who may hereafter be injured by the Chinese authorities.

I will abstain from any remarks on the first head.

There is but one claim, that of Messrs. Nott & Co., disallowed by the Commissioners,—in which case application has been made for a part of the surplus referred to. The claimants allege that their agents in China were too far from Macao, the place where the Commissioners met, to allow them to appeal to the Minister in season. The Committee will be enabled to judge of the sufficiency of this reason for considering the claim in that case an open one.

The award in the Caldera case is the only one complained of as having been inadequate. As all the facts and arguments in the case are embraced in the accompanying papers, the Committee can form their own opinion upon this point.

The Minister who concluded the convention pursued a judicious course in requiring from the Chinese a sum in gross adequate to meet the sums claimed in the several cases. This, however, can hardly be allowed to imply, that, even in his opinion, the claimants in those cases ought to receive the amounts which severally they might expect.

Congress made it the duty of the Commissioners, by an investigation judicial in its character, to ascertain the amounts justly due; and if the claimants should be dissatisfied with the decisions of the Commissioners, an appeal to the Minister was allowed, whose decision was expected to be final.

The expediency of sanctioning a review of decisions of the Commissioners or arbiter may be deemed questionable. They were all of high character, peculiarly qualified for the trust conferred upon them. It is for Congress to consider the conveniences and inconveniences of such a precedent, when the Government, in all its branches, may be considered to have already fulfilled its duty to the claimants, collectively and individually.

The whole subject is one of a purely legislative character, affecting a fund which, although it came into the Treasury in a peculiar manner, seems to me to belong to the United States. This Department has no authority to inquire whether there are equities existing on the part of any of our citizens which Congress ought to consult in directing the disposition of the fund. If Congress should impose any inquiry of that nature upon the Department, it would undertake the performance of it cheerfully and with a purpose only to consult justice and the public advantage. But the Department sees no ground for recommending such a measure in the present case.

I have the honor to be, Sir, your very obedient servant,

William H. Seward.

Hon. Charles Sumner, Chairman of the Committee on Foreign Relations, United States Senate.

(B). Page 454. CLAIMS SINCE THE AWARD.

It remains to speak of claims which have been brought forward or renewed since the awards were made.

One of these is that of Matthew Rooney, master of the bark Caldera, which had been presented to the Commissioners, but was not considered by them, in the absence of proof of citizenship. In 1864 his representatives produced to Mr. Burlingame evidence on this head, and the latter directed that he should be paid in the same manner and proportion as other persons interested in the same class of claims had been paid by order of Mr. Ward, our Minister at Peking.[139]

Mr. Burlingame says, in his dispatch reporting the action which he had taken in this matter: “There is no other demand that can ever come up for payment out of this Indemnity Fund, which has not been examined and decided.”[140]

Other claims have, however, been brought to notice. Some of these are known as the Caldera claims; another is the Neva or Nott & Co.’s claim.

The Caldera was a Chilian bark. On the 5th October, 1854, she sailed from Hong-Kong for San Francisco. During the ensuing night she encountered a storm, by which she was so injured as to be obliged to seek an anchorage. This she found, on the 7th October, between islands lying off the Chinese coast. Here she was attacked and plundered by successive piratical bands. The captain escaped and made his way to Hong-Kong, when, upon his information, steps were taken to recover the property and punish the pirates. A small portion of the cargo was found, and summary justice was inflicted upon such of the pirates as were captured.

The master of the Caldera was an American. An American firm were shippers by her, and various American insurance offices had taken risks upon the hull of the vessel and the larger portion of her cargo. These all appealed to Mr. McLane, then the chief diplomatic officer of the United States in China, with a view to secure indemnity. Mr. McLane declined to take action, declaring that our treaty offered “no basis whatever on which to make a claim against the Chinese Government,”[141] and referred the subject to Mr. Marcy, then Secretary of State. The latter responded, under date of October 5, 1855, “that the parties injured were entitled to indemnification from the Government of China, if not specially by treaty, at least by general principles of international right and obligation.”[142] The same matter forms the subject of a dispatch from Mr. Cass, Secretary of State, to Mr. Ward, dated May 5, 1859, in which, after declaring that “the decision of the case will rest with the Commissioners and yourself,” and detailing certain allegations made to him by the claimants, who appear to have been very active, he says: “If facts of such a nature be proved, the responsibility of the Chinese Government and its duty to make indemnity would seem to be fixed, according to the treaty, as well as according to the Law of Nations.”[143]

The matter was brought before the Commissioners in 1859, and a patient hearing seems to have been given by them, the result of which was a disagreement between them. Both rendered elaborate opinions: one adjudging that no portion of the claims should be allowed; the other, an opposite view, and he proceeded to assess the damages sustained by the claimants. These he estimated at forty per cent. of their claim, holding that the vessel and her cargo had been injured by the storm to the extent of sixty per cent. of their value. The case then went before Mr. Ward, whose conclusion was expressed in the following words:—

“Under the instructions of Mr. Marcy, thus reaffirmed by Mr. Cass, my duty may be discharged by ascertaining, as far as possible, what have been ‘the actual losses of our citizens.’ Satisfied with the award of Mr. Roberts on this point, I have approved the same, and ordered the amounts awarded by him to be paid to the respective claimants.”[144]

The amounts so paid exceeded $54,000 in coin. This was received by the several claimants, and it does not appear that they protested against the awards. Some of them were, however, dissatisfied, and in 1863 addressed Mr. Burlingame, setting forth their views, and asking him to favor their purpose for a rehearing. Mr. Burlingame, as will be seen on reference to his dispatch of October 5, 1863,[145] entered on a thorough examination of their statements, and arrived at the conclusion that the awards ought not to be disturbed, using strong language in this sense.

The Neva was a British schooner. Messrs. Nott & Co. were American merchants, residing at Hong-Kong. On the 16th October, 1857, they shipped by the Neva, then bound for the port of Foo-chow, five packages containing twenty thousand Mexican dollars. The vessel sailed at 3 o’clock P.M. of the 17th, and the same evening, while at anchor a short distance beyond the limits of the port of Hong-Kong, five Chinese came alongside and requested passage to Foo-chow, which was granted. At 11 o’clock that night these Chinese and the Chinese members of the crew took possession of the vessel; and having murdered the master and some of the crew and secured the rest, they broke into the hold, seized four of the packages of silver and removed them to the shore. The efforts of Messrs. Nott & Co. to recover the treasure were unsuccessful; and finally, the firm having ceased to exist, the agent representing their interests placed the claim before the Commissioners, who rejected it. Correspondence with the State Department ensued, and in 1869 the representatives of the firm appeared before Congress, declaring that their agent was absent from the South of China, where the Commissioners held their sittings, at the time when the awards were made, and that they had then, innocently, been deprived of their right to appeal from them to the Minister. The Attorney-General was directed by Congress to examine their claim, and, if in his judgment it was valid, he was empowered to award its payment out of the Indemnity Fund. The Attorney-General decided in favor of the claimants, and directed payment of a certain sum in gold. Mr. Washburne, then Secretary of State, held that he was not authorized to make the payment in any other than current funds of the United States. From this ruling the claimants have lately appealed to the Court of Claims, which has decided that the award of the Attorney-General should be complied with. This will make a small deduction from the fund.