670 FRANK H.H.KING case.[Indemnity advance is quite reasonably referred to simply as the Boxer Indemnity and the term'Indemnity'in this paper should be so understood.] The Powers actually recognized that indeed China could not repay, certainly not from available revenues of the Imperial Maritime Customs.Therefore they agreed that administration of certain native customs would be undertaken by the IMC and,more importantly, that China's import duties,over which China itself had lost autonomy (another point of irritation),should be increased some 5%ad valorem, thus increasing revenue sufficiently-even before other sources of revenue developed with the hoped for improvement of the economy- for payments to be made as scheduled.In this sense part of the Indemnity was apparently paid by the Allies themselves,a judgement which depends on determination of the incidence of the import duties and the possibility that the Powers would in any case have eventually agreed to an increase in duties,that is,a recalculation permitting duties to rise to a level which would offset the depreciation of silver. This 'tariff reform'has a history separate from that of the indemnity; 'tariff autonomy,China's ultimate objective,was not being officially considered.9 The Allies further arranged that the advance should be repaid in five series,with the first requiring repayment of principal immediately,the others phasing in so that annual payments increased gradually from Protocol Taels'18.8 million in the years 1902 to 1910, reaching a maximum of Protocol Taels'35 million for the years 1932- 40.This was designed to take into account China's expected increased ability to pay,both through an increased revenue and through a pay- down of already existing government-guaranteed loans and Japanese indemnity payments.The day of heavy capital repayment had thus been delayed until,it was hoped,the Chinese economy would be better able to bear the burden.10 In this way,however,the Allies damaged their own economic plans for China and opened the way for a series of alternative arrangements which were to cause endless negotiations and eventual defaults. 9 The British actually vetoed a 10%increase on the grounds that British importers would be financing indemnity payments to other powers,including key trade rivals This argument is based on the predominance of British trade and the relatively low percentage (11.25%)of the Indemnity payable to Britain.The Chinese proposed a 33-3%increase.See British Parliamentary Papers,China No r(19o2). 10 To illustrate the complexity of the detail,interest was calculated from the date of the Protocol but not payable until 1 January 1go2;the arrears could be paid off over a period of 3 years but at 4%interest.670 FRANK H. H. KING case. [Indemnity advance is quite reasonably referred to simply as the Boxer Indemnity and the term ‘Indemnity’ in this paper should be so understood.] The Powers actually recognized that indeed China could not repay, certainly not from available revenues of the Imperial Maritime Customs. Therefore they agreed that administration of certain native customs would be undertaken by the IMC and, more importantly, that China’s import duties, over which China itself had lost autonomy (another point of irritation), should be increased some 5% ad valorem, thus increasing revenue sufficiently—even before other sources of revenue developed with the hoped for improvement of the economy— for payments to be made as scheduled. In this sense part of the Indemnity was apparently paid by the Allies themselves, a judgement which depends on determination of the incidence of the import duties and the possibility that the Powers would in any case have eventually agreed to an increase in duties, that is, a recalculation permitting duties to rise to a level which would offset the depreciation of silver. This ‘tariff reform’ has a history separate from that of the indemnity; ‘tariff autonomy’, China’s ultimate objective, was not being officially considered.9 The Allies further arranged that the advance should be repaid in five series, with the first requiring repayment of principal immediately, the others phasing in so that annual payments increased gradually from ‘Protocol Taels’ 18.8 million in the years 1902 to 1910, reaching a maximum of ‘Protocol Taels’ 35 million for the years 1932– 40. This was designed to take into account China’s expected increased ability to pay, both through an increased revenue and through a pay￾down of already existing government-guaranteed loans and Japanese indemnity payments. The day of heavy capital repayment had thus been delayed until, it was hoped, the Chinese economy would be better able to bear the burden.10 In this way, however, the Allies damaged their own economic plans for China and opened the way for a series of alternative arrangements which were to cause endless negotiations and eventual defaults. 9 The British actually vetoed a 10% increase on the grounds that British importers would be financing indemnity payments to other powers, including key trade rivals. This argument is based on the predominance of British trade and the relatively low percentage (11.25%) of the Indemnity payable to Britain. The Chinese proposed a 33.3% increase. See British Parliamentary Papers, China No 1 (1902). 10 To illustrate the complexity of the detail, interest was calculated from the date of the Protocol but not payable until 1 January 1902; the arrears could be paid off over a period of 3 years but at 4% interest