Altogether, the most important consequence of the War was the establishment of a heavy foreign debt. Hitherto China had only contracted in Europe insignificant loans of a few millions of francs. During hostilities her foreign indebtedness rose to £7,000,000, a mere trifle, and, moreover, the lenders were in possession of excellent security; but the War Indemnity and other urgent expenses necessary for the rehabilitation of the country mounted up to £48,000,000, so that now the interest on this debt, taking the rate at 5 per cent., would absorb £2,400,000, and, by adding the arrears of already existing loans, this figure would attain about £2,800,000, equivalent to nearly the whole of the Customs revenue. The Customs duties are paid in silver, but it would be absolutely necessary to stipulate, if a considerable loan is to be floated on the European market, that the interest should be paid in gold. The question, therefore, very naturally arises whether, in view of so small a margin, the fluctuations in the value of silver, which have already caused the _hai-kwan_ taël to fall from 6s. 7d., its value a quarter of a century ago, to 2s. 10d., the average rate since 1897, will not sooner or later result in the Customs receipts proving insufficient to cover the payment of the arrears. Nobody in his senses would dream of lending money to China on the mere security of her general resources, and she would, consequently, be obliged to assign to her creditors new securities, and place in their hands the administration of new branches of revenue. On the other hand, stripped of about £2,800,000 from the total revenue, which the most optimistic estimate gives at £24,000,000, she would have to look for new channels to add to her income, either by increasing the taxes, or by permitting foreigners to exploit the resources of the country, conceding to them railway and mining concessions on the basis of leases or joint profits. The first proposal ran the risk of unpopularity; the second was more tempting, but it meant the introduction into the country of that very Western civilization which the Chinese Government had opposed with all its might for the last fifty years. The monetary difficulties of the Celestial Empire brought about a renewed interference by Europeans in her affairs, if only in the collecting of the taxes, and, also, a sort of financial embargo, the dangers of which are sufficiently manifest in countries like Egypt. The Government of Peking was well aware of this, and, therefore, spared no effort in obtaining a reduction on the £34,500,000 War Indemnity, and even attempted to arrive at an understanding with Japan respecting the retrocession of Liao-tung without supplementary disbursement.