I visited the Resident on August 21, and told him I had perused the Tibetan reply to him which he had handed to me at our last meeting. It was more satisfactory than the first reply, and there were some points which the Tibetans would now evidently agree to. I proposed, then, that we should get these points settled first and out of the way, so as to make a start, and then work on to the more contentious clauses.

I then remarked that I had heard the Dalai Lama had without any doubt whatever fled the country. The Amban said this was true, and he was evidently not flying to China, but to the north—possibly to join the Great Lama at Urga. I said he would hardly be flying to China, for he would surely have obtained the Amban’s permission to proceed to Peking, or at least have informed him of his intention. The Amban replied that he had gone off without any warning, and he had now definitely decided to denounce him to the Emperor, and would to-day or to-morrow send me a telegram which he would ask me to have despatched to Peking as quickly as possible. I said I would do this service for him, and I considered he was acting with great wisdom in denouncing the Dalai Lama, for it was he who had brought all this trouble upon his country, and he deserved to suffer for it. I was not surprised, however, at so young a ruler coming to grief, for our experience in India was that a young chief, even when he had only temporal authority in his hands, was very liable to get into the power of unscrupulous and designing men, and rush off in a headstrong way on a foolish course. For a young Dalai Lama, who had not only temporal, but also supreme spiritual power, the tendency to go wrong must have been almost irresistible.

The Amban said this certainly had been the case with the present Dalai Lama, who had always been headstrong and obstinate, and had never followed good advice.

The four hostages which I had demanded, one from the Government and one from each of the great monasteries, for the good behaviour of the monks in future arrived on the 24th. They were in abject terror, and evidently thought they would have their heads cut off before their time was up. On the same day a proclamation was posted up in Lhasa by the Government, forbidding the people to interfere with foreigners in any way. This and the hanging of the monk who had made the murderous assault on the two British officers had the effect of stopping all other fanatical assaults, and after the treaty was signed I returned the fine and let out the hostages, who, much to their surprise, had had a very good time with us and been treated royally.

There was a considerable pause now in the course of the negotiations, though Captain O’Connor the whole time was, day by day and all day long, interviewing innumerable Tibetans of every grade; while Mr. White and I used to see the Tongsa Penlop and the Nepalese representative, and think of any means of getting over the difficulty about the indemnity. On August 28 the Ti Rimpoche, the Yutok Sha-pé, and the Tsarong Sha-pé, accompanied by the Tongsa Penlop, called upon me. They announced that they had been deputed by the National Assembly to discuss the settlement direct with me, as they thought there was delay in dealing through the Resident. I remarked that I understood they were fairly well agreed to accede to all our terms except in regard to the indemnity. They said they had written to the Amban, saying definitely that they would agree to all the terms except that regarding the payment of an indemnity, and except in regard to opening further marts in future. They expressed a wish to make the settlement directly with me, and when we had agreed upon it, then they would communicate the result to the Resident. I said that I should be ready to receive them whenever they wished to discuss matters with me. What I should tell them and what I should tell the Amban would be exactly the same, but if they liked to hear my views from me direct I would gladly receive them.

They then again announced that they were ready to agree to all our terms but one. The indemnity they could not pay. Tibet was a poor country, and the Tibetans had already suffered heavily during the war; many had been killed, their houses had been burnt, jongs and monasteries had been destroyed; and, in addition to all this evil, it was impossible for them to pay an indemnity as well. The little money they had was spent in religious services in support of the monasteries, in buying vessels for the temples and butter to burn before the gods. The peasants had to supply transport for officials, in addition, and there were no means whatever for paying the heavy indemnity we were demanding.

I replied that the war in Sikkim had cost us a million sterling, and the present war would cost another million. After the Sikkim War the Tibetans had repudiated the treaty which the Resident then made, and we might very justifiably now ask for an indemnity for the Sikkim War, as well as for this. We were, however, making no such demand, and we were only asking from Tibet half the cost of the present war. I knew, of course, that Tibet had suffered from the present war, but no such suffering need have occurred if they had negotiated with me at Khamba Jong in the previous year. And, while they had suffered, we also had not escaped without trouble. Captain O’Connor had himself been wounded, and what we looked upon as extremely serious in this matter was that the representative of the British Government should have been attacked. If they attacked the Resident here, they knew well how angry the Emperor of China would be. I quite recognized, however, the difficulty they had in paying the indemnity in cash within three years. I would, therefore, be prepared to receive proposals from them as to modifications in the manner of payment. If, for instance, they thought it impossible to pay the whole indemnity in three years, and would like the term extended to five, I would submit such a proposal for the orders of the Viceroy. Or, again, if they would prefer to pay the indemnity at the rate of a lakh of rupees a year for a long term of years, I would ask Government if the difficulty might be met in that way.

They expressed their disappointment at this answer, as they had hoped that when they had agreed to all our terms except this one I would have given way on it, and excused them paying the indemnity, and they trusted I would not send them back to the National Assembly with so disheartening an answer. In most cases of bargaining, if one party got half the things he had asked he would be satisfied. I had got all the points except one, and still was not satisfied. If I could not agree to that myself, would I not refer it to the Viceroy? If I did this they had great hopes the Viceroy would excuse them the indemnity.

I replied that a reference to the Viceroy would be of no use, for it happened that the terms I was now asking were modifications ordered by the British Government. The Ti Rimpoche said that if the British Government had been lenient once they might be lenient again, and asked me to put their petition before them. I replied that the British Government had considered this matter most carefully before issuing these demands, so if I now dared to suggest that one of them should not be carried out I should be immediately dismissed from my post. I was prepared, as I had said, to submit proposals for alternative methods of payment of the indemnity, and I would be also prepared to submit proposals for privileges of concessions in Tibet which might be taken in lieu of part of the indemnity, but the indemnity, in some manner or other, would have to be paid.

The Tsarong Sha-pé said we were accustomed to fish in the ocean, and did not understand that there were not so many fish to be got out of a well as could be caught from the sea. A field could only yield according to its size and the amount put into it. A poor peasant got only just enough from his field to support himself and his family, with a very little over for religious offerings. It was hard, therefore, that we should demand so much from Tibet, and the National Assembly would be very much disheartened at the result of this interview.