THE REAPPEARANCE OF THE BOXERS
In the years immediately before and after the Sino—Japanese War, Britain, France, Germany, Japan, Russia, and the United States began to export capital to China and to establish banks there which issued their own notes. This development was as much to provide the machinery for financing foreign loans to China as for meeting the requirements of the expanding import trade and foreign capitalist enterprise. To pay the indemnity imposed on China by the Treaty of Shimonoseki, the Manchu government had to obtain foreign loans, and between 1894 and 1899 loans totalling 370 million taelsI were obtained in this way. This sum was four and a half times the total annual revenue of the Manchu treasury from domestic sources. To secure the loans, the foreign lenders obtained further liens on the Imperial Maritime Customs and then on the salt gabelle in addition.
During the thirty-five years between 1864 and 1899 the value of China's imports rose from 51 million to 264 million taels. Her foreign trade, which had formerly had a favourable balance of two million taels per annum, now had an unfavourable one of 69 million taels per annum. China's silver reserves were virtually exhausted. The influx of machine-made cloth and yarn had seriously affected the urban and rural handicrafts, especially workshops working on a family basis, and many millions of villagers were thus deprived of a livelihood.
The situation became worse and worse throughout the whole of 1898. The military expenditure of the Sino-Japanese War and the huge indemnity imposed on China led finally to bankruptcy. The pre-war foreign debt amounting to 15 million taels grew to 200 million, and to cover this debt large shipping, mining and railway concessions were made to foreigners. In order to guarantee the repayment of the debts, foreigners were allowed to supervise the government revenue. An attempt to raise a domestic loan of 100 million taels was made in 1898, but only about half of it was subscribed in spite of the fact that the government proposed to bestow mandarin rank on those who did subscribe and to penalize those who refused to do so.