State Department Statement on the President's Executive Order on Remission of Further Payments of Installments of the Chinese Indemnity

On July 16, 1925, the President signed an Executive Order, directing the Secretary of the Treasury to remit to the Board of Trustees of the China Foundation for the Promotion of Education and Culture, as the agent designated by the Chinese Government to receive them, all payments of the annual installments of the Chinese indemnity made subsequent to October 1, 1917, including sums already received and all future payments in respect to the indemnity.

The issuance of the Executive Order is the culmination of a series of events beginning in 1900 when the disturbances in China known as the "Boxer Trouble" took place. As a result of these disturbances the Chinese Government was required in 1901 to execute a bond to pay to the foreign powers, over a period of forty years, as indemnity for the losses incurred by their citizens, both of life and property, and for the military expenses incurred by the different governments, the sum of Taels 450,000,000 (U.S. $335,900,000) and interest. This sum was apportioned among the different countries, the American share being $24,440,778.81. In 1908, by Executive Order pursuant to a Joint Resolution of Congress, the amount of the American share was reduced to $13,655,492.69, the Chinese Government devoting the annual payments thus set free to educational purposes. In 1917 China joined the side of the Allies in the European War and at this time the powers agreed to a postponement, without interest, of the indemnity payments for a period of five years. In 1921, before the time for the resumption of the payments had arrived, a resolution was introduced in the Senate by the late Senator Lodge, having for object the remission of all further payments of the American share of the indemnity. The resolution passed the Senate, was introduced in the House, but final action was not taken upon it before adjournment. At the end of 1922 the five year postponement of the indemnity payments expired and the indemnity payments were resumed. In 1924 the Honorable Stephen G. Porter introduced a resolution in the House similar to the resolution previously introduced by Senator Lodge. It passed the House and Senate and was approved by the President on May 21, 1924.

On June 14, 1924, the Honorable Sao-Ke Alfred Sze, Minister of the Republic of China at Washington, to whom a copy of the Joint Resolution had been sent by Secretary Hughes, in expressing the thanks of his Government, stated that it was proposed by his Government to devote the funds thus made available to educational and cultural purposes, paying especial attention to scientific requirements, and to entrust the administration of the funds to a Board which should be composed of Chinese and American citizens as members. On September 17, 1924, a Mandate was issued by the President of the Republic of China, creating "The Board of Trustees of the China Foundation for the Promotion of Education and Culture" for the custody and control of the remitted funds. The Mandate named nine Chinese and five Americans as members of the Board. Among the Chinese members are the Honorable Sao-Ke Alfred Sze, the Honorable V. K. Wellington Koo and the Honorable W. W. Yen, all three of whom have at different times held the post of Minister of Foreign Affairs of the Republic of China. The American members of the Board are Dr. Paul Monroe, Director of the Teachers' College of Columbia University; Dr. John Dewey, Professor of Philosophy at Columbia University; Mr. John Earle Baker, Adviser to the Chinese Ministry of Communications; Mr. Roger S. Greene, of the Rockefeller Foundation, and Mr. C. R. Bennett, of the International Banking Corporation. Subsequently one more Chinese was added to the Board, bringing the number of Chinese members up to ten.

On June 3, 1925, a meeting of the Board was held at Tientsin, China, at which the following resolution was unanimously adopted:

"Resolved that the funds from the remitted portion of the indemnity due the United States to be intrusted to the China Foundation for the Promotion of Education and Culture be devoted to the development of scientific knowledge and to the application of such knowledge to the conditions in China through the promotion of technical training of scientific research, experimentation, and demonstration, and training in science teaching, and to the advancement of cultural enterprises of a permanent character such as libraries and the like."

On June 6, 1925, the Chinese Minister addressed a note to the Secretary of State, communicating the text of the resolution above quoted and stating that, in order to carry out the intent of the Joint Resolution of Congress, the Board was now ready to receive the remitted funds from the American Government.

As stated above the President, on July 16, 1925, signed an Executive Order, directing the Secretary of the Treasury to remit to the Board all payments of the indemnity received after October 1, 1917.