In this same month the affairs relating to the Standard Oil Company's exploration were finally wound up. The geological experts they sent over had not "struck" oil enough to pay. Drilling expeditions had come over, which by the spring of 1915 had found traces of oil, and the Chinese were considering giving them further areas for investigation. But as they wished to modify their contract relating to production and refining activities, Mr. E.W. Bemis, vice-president of the company, came on and negotiated for a whole summer with the officials. He left without concluding an agreement. Not only had he received the support of the Legation at Peking and of the American Government, but the Chinese were anxious to extend the privileges of exploration; his decision to abandon the negotiations must therefore have been based on a total change of policy. The company had apparently decided not to develop production in China, but to continue merely its marketing business. It was to be expected that competitors would be discouraged from undertaking similar explorations. Mr. Hsiung Hsi-ling, ex-Premier and chief of the National Oil Administration, called on me at this time and gave me an account of his final negotiations with the company. He had offered to establish a joint Chinese and American enterprise if moreextensive search should reveal oil deposits of great value.
The mineral situation in China was being surveyed during this time by representatives of the New York Orient Mines Company, Mr. John W. Finch, Dr. F. Bain, and Mr. Joseph E. Johnson, Jr. The attitude of these men, whose training as observers and clean-cut scientific methods gave their conclusions a particular cogency and definiteness, interested me. They had found that the iron deposits of China were not so extensive as is usually supposed. They believed, also, that the market for iron products could only gradually be developed with the growth of the general industry. They had analyzed the organization of the Hanyehping Iron Works, and learned that its lack of success was due to faulty planning, which necessitated the bringing of both the coal and iron ore from a distance to the central point of manufacture. They believed that for the time there was room for only one first-class iron and steel enterprise in China. As smaller enterprises would hardly pay, they favoured a national industrial plant, to be equipped on a scale to assure every advantage of short transport and economic production. The Premier gave them permission to investigate China's ore deposits, with a view to suggesting a basis upon which a national industry could be founded with temporary American financial assistance.
The Chinese Government had fully decided to adhere to its policy of nationalizing the iron deposits, and the decree already issued by Yuan Shih-kai was to be reënacted by parliament. The Chinese were eager to establish a national steel industry. It should help supply the national needs for iron products, with the aid, if necessary, of foreign capital. They would not take the sole assistance of the Japanese, because they knew that in that case the Chinese industry would be confined to the production of pig-iron and would become the slave of the steel industry of Japan. China would furnish raw materials; Japan, the finished products.
Another secret agreement, this time with Japan, came to light. A loan of 3,000,000 yen had been concluded with Japanese banks in the latter part of 1916, and the secret agreement attached thereto gave Japanese interests the right to meet the lowest price of any competitor in bidding on any materials for the Chinese telephone and telegraph service. Of course, this would have destroyed the equal opportunity for other nationals in this business. The contract had been signed by a notoriously corrupt official, who was completely under Japanese influence and had since fled to escape prosecution for corruption.
I protested strongly. I told the Minister of Communications that the provision was monopolistic, therefore in conflict with the treaties. His answer disavowed the existence of the provision. But I knew it did exist among the original agreements; nevertheless, the awards actually made at this time, after my protest, were in accordance with the bids submitted, and with the recommendations of the experts.
In a talk I had with the Premier during the spring of 1917 I advised him to take up quickly the offer of the American International Corporation to float the first bond issue of $6,000,000 on the railway to be constructed by the Siems-Carey Company. The Ministry of Communications was obstructing it, acting under Japanese influences. I told the Premier that Mr. Carey's authority to conclude the loan might be revoked at any time, whereupon he promised to instruct the acting Vice-Minister of Communications to complete the transaction forthwith.
The Ministry of Communications was then in charge of one Chuan Liang, who had, in fact, long been considered as representing the Japanese element. He had married a Japanese woman. Chuan refused obstinately, first, to take up the negotiations, then, to advance them when they were begun. The rate of interest and terms of issue offered were fair, considering existing market values; but the Americancompany agreed to make a concession and raise the issue price.
Chuan continued to be stubborn. I spoke to the Premier, General Tuan, about it; President Li himself gave his support, and the orders to make the loan were thus reënforced. Still delay. After General Tuan's retirement, Dr. Wu Ting-fang as acting Premier again issued orders, which were repeated for the third time by General Chiang when he, in turn, displaced Doctor Wu. All these high officials concurred. Yet, in an astounding manner, the acting vice-minister, together with a ring of petty officials in his ministry and in the cabinet office, blocked the carrying out of the orders issued by the President, the Premier, and the whole cabinet.
But Dr. Wu Ting-fang was anxious to see the contract carried out. He suggested that I write a note demanding its execution, which I did on June 6th. Wu intended to have the successive orders published in theGovernment Gazette, and, thus published, to be communicated to me officially by the Foreign Office in response to my note. But the petty ring delayed the publication. Meanwhile, the answer of the acting vice-minister was prepared and inserted in theGovernment Gazetteon the 27th, before the Foreign Office could communicate it to me. It presented unfairly the proposals of the American company, its language was almost insulting.
During all this time the high Chinese officials, who were my friends, were at a loss to explain to me how this subordinate's defiance of their orders could be successful. They intimated that the obstruction must be due to Japanese influence exercised in opposition to American enterprise in China. We noted that immediately upon publication of the vice-minister's answer and before we knew about it ourselves, a secretary of the Japanese Legation quite officiously expressed to one of the American secretaries his surprise at such a publication.
But by this act the vice-minister had overstepped themark. The leaders of the Communications party, who were holding aloof from politics with General Tuan, strongly condemned Chuan, who had always been dependent on them. He showed a remarkable change. He even sent emissaries to me, pleading for forgiveness and stating that he was in no way animated by hostility to American interests, but had acted on an honest though mistaken view of the transaction.
Calling on me on July 2nd, he repeated his apology. On the 30th of June the Ministry of Communications had formally accepted the offer of funds by the American company. Thereafter negotiations were again interrupted by political changes and disturbances.
This incident will serve to illustrate the complexity of Chinese affairs, and the condition of disorganization in which the Chinese Government was at this time.
The creation of a Chino-American Industrial Bank was the subject of many discussions I had with Chinese officials and financiers. This occupied a good deal of my attention during 1918, while Mr. Hsu Un-yuen, after his retirement from the presidency of the Bank of China, was devoting his time to working out a plan and securing the support of prominent Chinese for this undertaking. Mr. Hsu Sing-loh was also working on it independently; Mr. Hsu was secretary of the Minister of Finance, educated in England, and exceptionally well informed. In December of 1918 I accompanied Mr. Hsu to the house of Mr. Yang, a capitalist interested in the China Merchants Steamship Company, where we met with the Premier, Mr. Chien Neng-hsun, and Mr. Chou Hsueh-hsi, who had recently been Minister of Finance. Here we talked over matters of banking and finance, with Mr. Chou leading the conversation. He was sure the Government would give a favourable charter that would enlist the necessary capital. Chinese ideas about an industrial bank were vague; in some mysterious way it was thought that it could produce capital for developing industries, or, rather, couldmanifold its capital for such uses. Three industries were ready—cotton, steel, and scientific agriculture—for an extensive development. He did not know how bad it is for a bank to lock up its capital in long-time commitments. I asked those present as to how ready the Chinese public would be to absorb the long-term bonds. Mr. Chou thought they would take them, if strongly backed, at a relatively low interest. All desired to go ahead. Ultimately the bank was founded, but by another group.
Before parting on that day our wealthy host brought forth from the strong-boxes many great treasures of Chinese art, including paintings of the Sung and Ming periods. China boasts only one museum. Only through seeing such private collections can one form an estimate of the richness and extent of Chinese art treasures. For an hour I looked on delightedly while one after another of these precious works of Chinese painting were unrolled before us. Chinese pictures are very modest. They come out when called, but retire again readily to the quiet of the storeroom. Also, darkness has not the dulling effect on the water-colours used by Chinese painters that it exercises upon pictures done in oils.
Incidentally, Minister Chow and other prominent officials had been interested in a savings bank combined with a lottery, which announced the sale of so-called premium bonds. There were to be quarterly drawings, at which a certain number of the bonds would receive prizes, ranging as high as $100,000. Mr. Chow explained to me that it would be futile for a Chinese savings bank to offer a matter of 5 or 6 per cent. interest for funds. Nobody would heed it, because of the profitableness of commercial enterprise. In order to strike public attention and to cause people to bring their money for deposit, the inducement of winning a large amount must be provided. The assurance that the original deposit itself would not be lost, but would ultimately be repaid, would be the second attraction.
The minister said that it was the plan of the bank to reduce the amount of prizes and to increase their number so that gradually the payment of a reasonable interest would be approached, as the people got accustomed to the idea of placing their funds in such an institution. The fact that this country, whose people are so frugal and parsimonious and where there is so much accumulated capital, should hitherto have been without savings banks appears remarkable to a stranger. But the high return on commercial loans, and the ever-present gambling instinct of the Chinese, account to some extent for this absence.
CHAPTER XX
A DIARY OF QUIET DAYS, AUTUMN OF 1916
September 3: Judge Elbert H. Gary has just been in Peking for ten days with Mrs. Gary and a small party. I took them to call on President Li who is now living in a private residence with extensive rockeries and gardens, in the East City. We threaded our way to a central pavilion where the President received us. He talked amiably about his desire to see the great resources of China developed with American coöperation. In the evening I gave a dinner to Judge Gary and the new Ministers of Finance and Communications. Charles A. Coolidge, the Boston architect, was also present. On the following day I arranged for the American guests to see the Winter Palace; Mr. Coolidge afterward said to me that the trip through the palace grounds had been the most interesting experience of his life from the point of view of architectural beauty. Someone with Judge Gary told me that every lunch, afternoon reception, and dinner engagement, for the entire stay in Japan, was already arranged for, together with many engagements for breakfast; adding: "The Japanese certainly know a great man when they see him, more than the Chinese." As a matter of fact, the Chinese are so unartificial that they do not think of organizing their hospitality to any distinguished guest. What they do is quite spontaneous; they are truly hospitable, but they do not understand the first elements of the art of advertising.
September 9: I took a trip to Dajessu with the Austrian minister. This temple lies about twelve miles beyond the summer palace. We walked part of the way; a Chinese fellin with us, and, as is customary, opened conversation. Without seeming unduly inquisitive he elicited information about the size of our families, our age, income, and the cost of our clothing, the material of which he greatly admired. When the Austrian minister told him that he had about four hundred men under him, our companion looked rather dubious, and finally asked: "Why, then, if you have so many attendants, are you walking?" The explanation that we preferred to walk did not seem to remove his doubts. He told us in turn all the details of his family and business affairs.
We spent the week-end at the beautiful temple, from which we took walks to the surrounding mountainside. A deserted temple on a high hill overlooking the valley is picturesque as any castle on the Rhine. We ascended to the summer residence of Mr. Hsu Un-yuen, a temple perched on a precipitous spur of the main mountain range. The temple had evidently been erected originally for a semi-residential purpose, though it was in a quite inaccessible place, where neither worshippers nor vacationists would ordinarily have sought it out. We found Mr. Hsu and his wife enjoying the magnificent view from a terrace opening out from the living apartments.
September 13: I gave a dinner to Mr. C.T. Wang, the vice-president of the senate, and a few representative members of parliament. We engaged in a general after-dinner discussion of politics. Most of the men present were Progressives. They argued volubly. The arguments and illustrations were such as one would hear in a Western country. I missed, as usual, a thorough discussion of underlying facts, traditions, and practices of Chinese life, out of which institutions should develop. I mentioned this; Mr. Wang said that they needed a guiding principle of organization, which they must get from the experience of constitutional countries. The question uppermost was the proposed election of provincial governors by the people of the respective provinces,instead of their appointment by the Central Government. Most of those present considered this change necessary, as through union and mutual support the appointive military governors could exercise great power and defeat the aims of Parliament.
September 14: Failing to get financial assistance from America, the Chinese have been considering Japanese offers of loans. Dr. Chen Chin-tao, forced by the situation and the importunities of the ministers, who need money, has signed a preliminary agreement for a loan of eighty million yen, on which an advance of five million yen is to be paid over immediately.
September 18: The House of Representatives to-day in secret session discussed the Japanese loan. I am informed that it was strongly attacked on the ground that certain mines in Hunan Province had been pledged to secure the advance. The Minister of Finance was not present, the vice-minister appearing to answer questions. The minister was violently condemned for signing the preliminary agreement without the consent of parliament. The argument was made that it related to an advance, but not to the main loan itself. That argument was not considered valid.
September 19: Negotiations were concluded with the Minister of Communications for a satisfactory adjustment of the American railway contract. Most of the proposals made were accepted, so that the American corporation ought certainly to be thoroughly well satisfied, considering all the changes and difficulties that have occurred since the original contract was made. That of the 17th May was allowed to stand, the changes being introduced by way of annexes. After the Chinese have thus gone to the limit of making the undertaking attractive to Americans, it is to be hoped that there will be no further delay; that, at least, some important constructive work will be done by Americans.
September 21: We welcomed a little son to-day in thefamily. I do not know that any children were born to any American minister in Peking before our little daughter Pauline came, in February, 1915. The two little ones were born into a strange world in which parents may well fear for the health of their children, because of frequent epidemics. Still, aside from such visitations, the Peking climate seems to be most favourable to children; they thrive and grow apace. Claire, the eldest daughter, aside from a terrible attack of appendicitis in which Dr. M.A. Stewart, of the Navy, saved her life, has been the very spirit of health. The faithful Chinese servants surround the children with every care.
October 3: I gave a men's dinner, attended by the ministers of Portugal, Russia, and Japan, and by Mr. Obata, the Japanese counsellor; Count Martel, the French first secretary; Mr. Aglen, Inspector-General of Customs; Mr. Alston, the British counsellor; Mr. Herrera de Huerta, formerly Mexican Chargé; Mr. Mitrophanow, of the Russian Legation; Doctor Willoughby, Doctor McElroy of Princeton, and other guests. It was really a dinner of welcome to the new Japanese minister, Baron Hayashi, who has recently arrived to take the place of Mr. Hioki. It was probably thought better to displace the minister upon whom had fallen the disagreeable duty of forcing through the Twenty-one Demands of 1915. Baron Hayashi, who had been ambassador in Italy, brings a long diplomatic experience and very careful methods. He is very silent, speaks little except when few or only one other person are present. In a larger company or at a meeting, he gives the impression of detachment and deep reflection. In social intercourse he is more retiring than his predecessor. He impresses me as a thoughtful, fair-minded man.
October 4: I am told that a guest at last night's dinner, a visitor from a distant country, complained because he had not been ranked with the ministers. As I had no information, nor have it now, that he was entitled to such ranking, I shall not worry. This is the first instance of any dissatisfaction with the seating. My predecessor related to me that a secretary of the British Legation once took his sudden departure before dinner for this reason. I have not always closely adhered to rank in seating, particularly at dinners where there are Chinese, in order to avoid a grouping which should make conversation impossible; but in such cases, of course, I always speak to whichever guest is slightly prejudiced by the arrangement and explain the reason to him. I have never noticed the least sign of displeasure. At a very formal dinner, it is of course always safer to follow rank and let the conversation take care of itself. Any enjoyment people get out of such a dinner they set down as pure profit, anyhow.
October 7: Ambassador and Mrs. Guthrie arrived to-day. They will be our guests for several weeks. Mr. Guthrie has not been very well, so has come for a rest. We spent the day together, talking over Chinese and Japanese affairs and relations. We agree on most points.
In the evening we dined at the officers' mess, after which there was dancing. Mrs. Ollie James and Mrs. Hall of Washington came with the Guthries. They were at the dinner, at which great cheer prevailed. Colonel Neville, the new commandant of the marines, radiates good fellowship. He is sociable, efficient, and ready to coöperate in all good causes. His officers and men seem to revere him, and a very fine spirit reigns in the marine compound.
October 11: I presented Ambassador Guthrie to the President, who had invited us for luncheon. We were only six at the table. Mr. Quo Tai-chi, the youthful English-speaking secretary of the President, interpreted. The President had many questions to ask about Japan. Then, he spoke quite hopefully about the outlook in China. Financial difficulties will be overcome through coöperation of parliament and the cabinet, so that the Government may count on popular consent to an increase in taxes.
President Li now occupies the palace where Yuan Shih-kai had lived. We met in a small apartment in the building constructed for the Empress Dowager, which was tastefully furnished in the best Chinese style.
October 13: The dinner season has fully set in. There are dinners every night, and will be, throughout the winter. This evening we entertained for the Guthries, having Prince Koudacheff, Baron Hayashi, and the wives of the Russian and Danish ministers, who are themselves absent.
October 23: The Political Science Association met at my house. The Minister for Foreign Affairs presided. Doctor W.W. Willoughby and Senator Yen Fu, the noted scholar, read papers. Over a hundred men were in attendance—the cream of the Western-educated officials, as well as European and American members.
October 29: The Guthries left yesterday. To-day arrived General and Mrs. Liggett, who will be our guests for a few days. General Liggett is tall and impressive-looking. We had a long initial conversation about the effects of the war in the Far East. The Philippines are beginning to be prosperous on account of the war demand for their products.
October 31: I presented General Liggett to President Li. In a long conversation the President was frank in his statement concerning the international difficulties of China. He expressed himself in strong terms as desirous of close coöperation with America. I gathered that he feared that certain foreign influences might stir up trouble between the parliament and the Government, and otherwise seek to cause embarrassment.
November 3: I went with a small party to the mountain temple Djetaissu. Mrs. Chadbourne, the sister of my friend Mr. Charles R. Crane; Miss Ellen Lamotte the writer; Mr. and Mrs. Burns of Shanghai; and Mr. Charles StevensonSmith, of the Associated Press, took this excursion riding on donkeys, with many spills as the animals slipped on the rocky road. The temple is near the top, commanding a magnificent view of the plains and of the higher mountains farther inland. It rises tier above tier, its platforms shaded by huge trees, with enchanting vistas of architecture and a broad sweep of view in all directions.
November 9: The Continental Commercial Bank Loan is announced. I am happy that this result has been achieved. An advance of only $5,000,000 will be made, but even that small sum will be an important aid to the Chinese Government. The fact that a big Western financial institution has taken up relations with China is promising. What foreign banking there is in New York is tangled up with European interests, follows the lead of London, and has not manifested much readiness to exert itself for the development of American interests abroad.
November 10: I attended the balloting for the election of the Vice-President of the Republic, at a joint session of the two houses of parliament. While no speeches were made, with the exception of brief discussion on points of order, yet it was of interest to see the general aspect of parliament. The procedure, certainly, was business-like. Balloting was by written and signed vote; after each ballot, the individual votes are read off from the tribune. I had the impression that a true election was going on. General Feng Kuo-chang, the Military Governor of Kiangsu, had the lead from the start, which was gradually increased by the balloting until finally he got the necessary majority. I could not stay until the result was announced, when there was a demonstration to honour the nominee. But I saw before me a body which had evidently mastered the procedure of parliamentary action, so that things were done with a smoothness and ease which implied long experience. Many people witnessed the election, among them several of my colleagues. I had a briefconversation with Mr. C.T. Wang, who was hopeful that, now the Vice-Presidential succession was settled legally and peacefully, the future of the Republic was assured.
General Feng has occupied a pivotal position at his post at Nanking. He is shrewd and clever. Like a boy standing over the centre of a seesaw, he used his weight to balance either side according as the pendulum movement required. He was at first believed to have given Yuan Shih-kai encouragement to be emperor, but when asked to express himself, had allowed the report that he was neutral to gain currency; then, as the opposition gained strength, he added his weight with gradually increasing force to its side, although never at any stage coming out with positive statements. His selection was an attempt to form a compromise between the militarist and the progressive parties.
November 10: I took a long excursion with Prince Koudacheff. We rode to the foothills by automobile, then climbed to the top of a lofty range back of his temple, where one can promenade for six or eight miles along the crest of the ridge with glorious views of mountain country on either side.
November 15: I had a long conversation with Baron Hayashi to-day.
November 20: Admiral and Mrs. Winterhalter arrived for a few days' visit. The Admiral is tall, gray-haired, strong-featured, of energetic movements. He has always manifested a deep interest in what is going on in China; we sat down for a long talk immediately after his arrival.
November 22: I presented the Admiral to President Li and we had a pleasant conversation, although the President was not quite so expansive and confidential as during my last call. As we made the rounds of calls on the cabinet ministers, I took the conversation beyond the ordinary civilities, so as to give the visitor an opportunity of getting more insight into the affairs now engaging our attention; also, touse this valuable time for an exchange of ideas with the Chinese leaders.
November 25: The French are protesting against the Continental Commercial Bank Loan, in so far as the security is concerned. The security of the tobacco and wine tax had been assigned to some previous French loans. I saw Doctor Chen, and Count Martel called on me. I take the position that as the French loan—which is small in amount and will require only a very minor portion of the proceeds of the tax—remains entitled to be the first lien, the French interests are in no way prejudiced. I imagine what they really object to is the eventual appointment of an American auditor or co-inspector for this revenue. As this, however, would still strengthen the security for their loan, I do not see that they have any reason for complaint. The representative of the French bank which is interested, saw me and made a tentative suggestion that if advisorships were established, the French might take the wine tax, and the Americans the tobacco tax. I feel, however, that the hands of the Chinese were perfectly free when the loan was made; there can be no objection, except on the supposition that whenever the Chinese do business, no matter how small, with respect to any subject matter, they impliedly give a lien on all future dealings.
December 4: I called on Doctor Morrison to take a look at his library. This unusual collection contains about twenty thousand books in European languages, dealing with China. The rare editions of early works are almost completely represented. Doctor Morrison, who lives in a Chinese-style house, has built a fireproof building for his books. He has devoted the last fifteen years to getting them together, and I believe has spent the larger part of his income on them. Recently he married a lady who had been for a while his secretary. They now have a little boy. I am told that his marriage and fatherhood have greatly augmented Doctor Morrison's standing and influence among the Chinese. A bachelor does not fit into their scheme of life. We repaired to his study, and for a long time were discussing affairs. We spoke particularly about the railway situation and the fact that construction on all the lines contracted for has practically been stopped. This is an enormous disadvantage to the Chinese. They have to pay heavy interest charges on the initial loans, for which there is as yet no income-paying property to show, but only surveys and partial construction. We agreed that the Four-Power bankers, for instance, have a very weak case if China should decide to cancel their contract for non-performance, as money to continue the building is not forthcoming. On the British concession of the Pukow-Singyang Railway, on which virtually no work has yet been done, the Government nevertheless has to pay interest on a million dollars of capital that has been advanced.
December 7: I visited Prince Koudacheff, the Russian minister. I jokingly asked him whether he found that the Chinese thought of the Russians as half-Asiatic, therefore as brothers. "No," he replied; "they count us with you and with the other Europeans, as a scourge and pestilence." In this conversation the Prince uttered a prophecy. "As a result of this war," he said, "the empire will be abolished in Germany."
(Neither of us at this time dreamed of the enormous subversions and convulsions which were soon to take place in Russia.)
December 8: I called on President Li in order to present a personal letter from President Wilson, in which the latter sends his good wishes. We discussed the American loan policy. The President, like other Chinese, finds it difficult to understand why America, with her great capital strength and industrial development, is so slow in taking advantage of opportunities for investment and development in China.The President said: "Americans love pioneering. In China there is pioneering to do, with the added advantage of having a ready labour supply and local capital, which may be enlisted. Why are they so slow to come in?" I agree with him that it is difficult to understand.
December 16: Mr. Victor Murdock is in Peking, bringing a breeze of American good-fellowship, and a vision unobstructed by theories. He finds China interesting, but, I fear, he will suffer the usual disability of the passing visitor, that is, he will see the unfavourable aspects of Chinese life and will not stay long enough to appreciate the deeper virtues.
This diary account of some of the happenings during the fall of 1916 contains nothing of the daily work of conferences, discussions, interviews, dictations dealing with the innumerable problems that come up from the consulates, or that arise in the capital directly, or referring to general policies which are hammered out and formed for action.
A great part of the work of a legation is concerned with foreseeing trouble and trying to avoid it. Such work usually does not appear at all in the record. In a country where conditions are complicated as they are in China, where there is such a crisscrossing of influences, it is easy to make a mistake if constant care be not exercised to keep informed of every detail and to head off trouble.
CHAPTER XXI
CHINA BREAKS WITH GERMANY
The time came for the United States to sever relations with the German Kaiser's government. I had taken advantage of the clear sunshine and mild air on Sunday, February 4, 1917, to visit Doctor Morrison at his cottage outside of Peking near the race-course. After lunch a messenger came from the Legation, bringing word that an important cablegram had arrived and was being decoded. I returned to town, and at the Legation Mr. White handed me the decoded message which said that the American Government had not only broken off diplomatic relations with Germany, but that it trusted the neutral powers would associate themselves with the American Government in this action of protest against an intolerable practice; this would make for the peace of the world. I was instructed to communicate all this to the Chinese Government.
After a conference with the first secretary, Mr. MacMurray, and the Chinese secretary, Doctor Tenney, I made an engagement to see the President and the Premier on that same evening. I felt justified in assuming that the invitation to the neutrals to join the United States was more than a pious wish and that there was some probability that the European neutrals would support our protest. As to China I had already informed the Government that we could reasonably expect support there. I therefore considered it to be the policy of the Government to assure a common demonstration on the part of all neutral powers, strong enough to bring Germany to a halt. So far as my action was concerned, I therefore saw the plain duty to prevail upon China to associate herself with the American action as proposed by my government.
I found President Li Yuan-hung resting after dinner in his palace and in an amiably expectant mood. With him was Mr. Quo Tai-chi, his English secretary. He was plainly startled by the prospect of having to consider so serious a matter, and did not at first say anything, but sat silently thinking. His doubts and objections were revealed rather through questions than by direct statements. "What is the present state of the war, and what the relative strength or degree of exhaustion of the belligerent parties?" "Could the Allies, even with the assistance of the United States, win a decisive victory?" Finally, he said: "The effect of such a far-reaching international act upon the internal situation in China will have to be carefully considered."
The President's secretary appeared strongly impressed with the favourable aspects of our proposal, so that he began to argue a little with the President. On my part, I pointed out the effects which a positive act of international assertion in behalf of a just cause and well-disposed associates would have upon China by taking attention off her endless factional conflicts. When I touched upon the ethical phases of the matter, the President fully agreed with me. I had particularly impressed upon him the need of prompt action in order that counsels might not be confused by adverse influences from without.
We next drove to the residence of the Premier, General Tuan Chi-jui, who was then playing an important part in the politics Of China. I recalled my first interview with him when he had received me in a dingy room, himself wearing a frowzy long coat and exhibiting a general air of tedium and lack of energy. There was no suggestion of the military man about him. The qualities upon which General Tuan's great influence is founded become apparent only upon a longer and more intimate acquaintance. Despite his real indolence,his wisdom, his fundamental honesty, and his readiness to shield his subordinates and to assume responsibility himself have made this quiet and unobtrusive man the most prominent leader among the Chinese militarists. His interest centres chiefly in the education of military officers. He is no politician and is bored by political theory. He is always ready to turn over the handling of affairs to subordinates, by whom he is often led into a course which he might not himself have chosen. This, coupled with extraordinary stubbornness, accounts for his influence often tending to be disastrous to his country. His personality, however, with its simplicity and pensiveness, and his real wisdom when he lets his own nature guide him, make him one of the attractive figures of China.
Though in himself the principal influence in the Government, Tuan left all details to his assistants, Mr. Tsao Ju-lin and General Hsu Shu-cheng. He preferred to play chess. He was, however, always ready to shoulder responsibility for what his subordinates had done. Often when he was deep in a game of Chinese chess, his mind focussed on the complexities of this difficult pastime, General Hsu would approach him with some proposal. Giving only half an ear to it, the Premier would respond, "All right" (How how). When, later, the results of the action thus taken turned out to be bad and the Premier asked for an explanation, he was reminded that he had himself authorized it. He would then faintly recollect, and would make a gesture toward his shoulder, which indicated that—very well—he took the responsibility.
But on this occasion General Tuan was all attention. He had with him Mr. C.C. Wu of the Foreign Office, who continued throughout these negotiations to act as interpreter. The circumstance that the Minister for Foreign Affairs, Dr. Wu Ting-fang, was ill and had to be represented by his son, and that in all important interviews both the Premier andyoung Mr. Wu were present, greatly facilitated the business and saved time which would have been needed to carry on parallel conversations in the Foreign Office and with the Premier. General Tuan was far from accepting the proposal at first sight. "It would be wise for Germany to modify her submarine policy," he stated, "because in land warfare she could press her opponents so seriously that her absolute defeat would be difficult unless the United States entered the war." He appeared to contemplate the possibility of China taking so unprecedented a step as the breaking of relations with a great power with less concern than did the President. We arranged for a longer discussion on the following day.
Far into that night I was in conference with the legation staff, and with certain non-official Americans and Britishers of great influence among the Chinese. These men looked with enthusiasm upon the idea of an association with the United States, aligning against Germany the vast population of China. While the energies and resources of China were not sufficiently mobilized to be of immediate use in the war, yet by systematic preparation they might bring an enormous accession of strength to the Allies if the war should last long. We felt, also, that through positive alliance with the declared policy of the United States, China would greatly strengthen herself internally and externally.
Dr. John C. Ferguson addressed himself directly to the Premier and the President; his thorough knowledge of Chinese enabled him to bring home to them the essential points in favour of prompt action. Mr. Roy S. Anderson and Mr. W.H. Donald, an Australian acting as editor of theFar Eastern Review, who were close to the members of the Communications Party and the Kuo Min Tang, addressed themselves especially to the leaders in parliament. Dr. G.E. Morrison, the British adviser of the President of China, had long worked to have China join in the war: he quietly used all his influence with the President and high officials,in order to make them understand what was at stake. Other Americans and British newspapermen, like Charles Stevenson Smith and Sam Blythe, who happened to be in Peking, all tirelessly working in their own way with men whose confidence they enjoyed, urged the policy proposed by America. These men made a spontaneous appeal based upon the fundamental justice of the policy of resisting an intolerable practice, and on the beneficent effect which a great issue like this would have in pulling the Chinese nation together and in making it realize its status as a member of the family of nations. However, what counted most with the Chinese was the fact that America had acted, and had invited China to take a similar step.
At a second long interview with the President, he asked me: "Would not a positive active foreign policy, particularly if it should lead to war, strengthen the militarist party?"
I replied that in my opinion such a contingency would strengthen decisively the Central Government, enabling it to keep the military in their proper place as an organ of the state and preventing the further growth of the pseudo-feudalism inherited from Yuan Shih-kai.
"But would the American Government assist China in bearing the responsibilities of such a step?"
Before replying to this question, I had to cable the Department of State for instructions as to what assurances I would be authorized to give to the Chinese Government in the event of their taking the action suggested by the United States. Unfortunately, as was several times the case during some critical situation, the cable connection was broken and I failed to get any reply to assist me during the negotiations.
With a map the Premier and I, later that afternoon, analyzed the military situation of the European Powers. From the analogy of the American Civil War, I expressed to him the belief that Germany could not resist the enormous pressure from all sides. "What," the Premier asked, "may beexpected of America by way of direct military action? Bear in mind that I wish for nothing more than for a strong America, able to exercise a guiding influence in the affairs of the world."
My positive belief that America would, if necessary, follow the severance of relations with the strongest kind of military action interested him. America had been represented to the Chinese as a big, over-rich country which lacked energy for a supreme military effort.
"What, then, will happen at the conclusion of the war?" he asked.
The fact that Japan had already made efforts to assure for herself the right to speak for China was worrying the Chinese. With the Premier, as with the President, the idea that, through breaking with Germany, China could assure herself of an independent position at the peace table, had much weight. Both men also faced the possibility of being drawn into the war. The Premier appeared to regard this with a certain degree of positive satisfaction; to the President it seemed a less agreeable prospect. I made it plain that the American proposal did not go beyond breaking off diplomatic relations with Germany, and, that by taking that step, China would effectually rebuke and discourage the illegal and inhuman acts of Germany on the high seas, keeping her hands entirely free as to future action. Should further steps be later needed, the road would be open.
Intensive discussions were going on all day Monday and deep into the night among the Chinese officials and the leaders of parliament. I received calls on Tuesday from many Chinese leaders who wished to talk over the situation. The progressive, modern-minded, and forward-looking among the Chinese readily supported the idea that China should range herself alongside the United States in this action. Admiral Tsai Ting-kan, who was very close to the President, laboured in company with Doctor Morrison to bring before LiYuan-hung all the considerations favouring positive action. The President, however, still adhered to his idea that it was safer for China to remain entirely neutral.
In the cabinet, Dr. Chen Chin-tao, the Minister of Finance, and Mr. C.C. Wu, representing the Minister for Foreign Affairs, from the earliest moment associated themselves with those of the opinion that China must act, and they led the younger officials. In the Kuo Min Tang, Mr. C.T. Wang, vice-president of the senate; Dr. Wang Chung-hui, the leading jurist of China; and General Niu Yung-chien, of revolutionary fame, were the first to become active. The PekingGazette, with its brilliant editor, Eugene Chen, came out strongly in favour of following the United States. A powerful public opinion was quietly forming among the Chinese. The Young China party was beginning to see the advantage which lay in having China emerge from her passivity.
When I returned from a dinner with the Alstons at the British Legation on Tuesday night, Mr. C.C. Wu brought me word from the cabinet that it would be quite impossible to take action unless the American Government could adequately assure China assistance in bearing the responsibilities which she might incur, without impairment of her sovereign rights and the independent control of her national forces.
The Chinese ministers had in mind two things: In the first place, the need of financial assistance, in order to make it possible for China eventually to participate in the war, if that should be desired; and, second, the prevention of all arrangements whereby Chinese natural resources, military forces, arsenals, or ships, would be placed under foreign control incompatible with her undiminished national independence.
All through Wednesday I struggled with this difficult problem. I had to act on my own responsibility, as I could not reach the Department of State by cable. If all the influences unfavourable to the action proposed were given time to assert themselves, the American proposal would be obstructed and probably defeated. The Chinese Government would act only on such assurances as I could feel justified in giving to them at this time; if I gave them none, no action would be taken. It seemed almost a matter of course, should China follow the lead of the American Government, that the latter would not allow China to suffer through lack of all possible support in aiding China to bear the responsibilities she assumed, and in preventing action from any quarter which would impose on China new burdens because of her break with Germany. Unable to interpret my instructions otherwise than that a joint protest of the neutrals had actually been planned by the American Government, and feeling that the effect upon Germany of the American protest depended on the early concurrence of the important neutral powers, I considered prompt action essential. I was sure that all sorts of unfavourable and obstructive influences would presently get to work in Peking.
When discussion had reached its limit, on the afternoon of February 7th, I felt it necessary to draw up a note concerning the attitude of the American Government. The tenor of this note I communicated to the Premier and the Foreign Office, with the understanding that I should send the note if favourable action were decided upon by the Chinese Government.
I believed that without such assurances the instructions of the American Government could not be carried out, and that it would act in all respects in a manner consonant with its position as a powerful government and as a leader of protest among the neutrals; moreover, that its relations with those who gave support in a policy of such fundamental importance would be determined by principles of equity and justice. I felt that the United States could not be less liberal toward a country coming to its support than toward those countrieswhich the American Government was now going to help. It was only these self-evident conclusions which I cautiously expressed in my note. The text of this note, in its essential part, had the following form:
Excellency:In our recent conversation concerning the policy of your Government in associating itself with the United States in active opposition to the unrestricted submarine warfare by which Germany is indiscriminately jeopardizing the lives of neutral citizens, you have with entire frankness pointed out to me that, whereas the Chinese Government is in principle disposed to adopt the suggestion of the President of the United States in that regard, it nevertheless finds itself in a position in which it would not feel safe in so doing unless assured that it could obtain from American sources such financial and other assistance as would enable it to take the measures appropriate to the situation which would thus be created.With like candour I have stated to you that I have recommended to my Government that in the event of the Chinese Government's associating itself with the President's suggestion, the Government of the United States should take measures to put at its disposition the funds immediately required for the purposes you have indicated, and should take steps with a view to such a funding of the Boxer Indemnity as would for the time being make available for the purposes of the Chinese Government at least the major portion of the current indemnity instalments; and I have indicated to you my personal conviction that my Government would be found just and liberal in effecting this or other such arrangements to enable the Chinese Government to meet the responsibilities which it might assume upon the suggestion of the President. I should not be wholly frank with you, however, if I were to fail to point out that the exact nature of any assistance to be given or any measure to be taken must be determined through consultation of various administrative organs, in some cases including reference to Congress, in order to make effective such arrangements as might have been agreed to in principle between the executive authorities of the two countries; and I therefore could not in good faith make in behalf of my Government any definite commitments upon your suggestions at the present time.I do, however, feel warranted in assuming the responsibility of assuring you in behalf of my Government that by the methods you have suggested, or otherwise, adequate means will be devised to enable China to fulfill the responsibilities consequent upon associating herself with the action of theUnited States Government, without any impairment of her national independence and of her control of her military establishment and general administration.
Excellency:
In our recent conversation concerning the policy of your Government in associating itself with the United States in active opposition to the unrestricted submarine warfare by which Germany is indiscriminately jeopardizing the lives of neutral citizens, you have with entire frankness pointed out to me that, whereas the Chinese Government is in principle disposed to adopt the suggestion of the President of the United States in that regard, it nevertheless finds itself in a position in which it would not feel safe in so doing unless assured that it could obtain from American sources such financial and other assistance as would enable it to take the measures appropriate to the situation which would thus be created.
With like candour I have stated to you that I have recommended to my Government that in the event of the Chinese Government's associating itself with the President's suggestion, the Government of the United States should take measures to put at its disposition the funds immediately required for the purposes you have indicated, and should take steps with a view to such a funding of the Boxer Indemnity as would for the time being make available for the purposes of the Chinese Government at least the major portion of the current indemnity instalments; and I have indicated to you my personal conviction that my Government would be found just and liberal in effecting this or other such arrangements to enable the Chinese Government to meet the responsibilities which it might assume upon the suggestion of the President. I should not be wholly frank with you, however, if I were to fail to point out that the exact nature of any assistance to be given or any measure to be taken must be determined through consultation of various administrative organs, in some cases including reference to Congress, in order to make effective such arrangements as might have been agreed to in principle between the executive authorities of the two countries; and I therefore could not in good faith make in behalf of my Government any definite commitments upon your suggestions at the present time.
I do, however, feel warranted in assuming the responsibility of assuring you in behalf of my Government that by the methods you have suggested, or otherwise, adequate means will be devised to enable China to fulfill the responsibilities consequent upon associating herself with the action of theUnited States Government, without any impairment of her national independence and of her control of her military establishment and general administration.
Final presentation of everything that had to be considered in making a decision was arranged with the Premier for Wednesday evening. I found General Tuan alone. We spoke awhile about the news of the day, then I began to go into the main matter. But General Tuan appeared weary and worried. This may have been the reason for the failure of the interpreters to make smooth connection: I suggested, as the Premier had had an excessively long day, that we meet again the following morning. It was arranged for ten o'clock at the cabinet office, just before the Thursday morning cabinet conference.
I had just dined with Mr. C.T. Wang and a number of parliamentary leaders. They were keen on the policy of following the United States. They had seen President Li during the day; he was still full of doubts, but stated that he would leave the decision in the hands of the cabinet, and would abide by the results. Mr. Wang believed that the President was gradually coming around to the American point of view, and that his acceptance of it would be the stronger and heartier because of the conscientious doubts which he was overcoming.
The negotiations of these three days had gone on quietly. The men upon whom rested the responsibility of making the decision were constantly in conference. Several men of influence worked with officials of the Government and leaders in parliament. But the outside foreign public was not fully alive to what was going on, and those who knew and were interested generally believed that ancient China would not take so unprecedented a step. The Japanese minister, Baron Hayashi, was absent from Peking. The German official representatives apparently had no idea that any radical action could come from the Chinese Government.
I arrived at the cabinet office on Thursday morning, at ten, and was shown to the room where the Premier was to receive me. As he had told me that Mr. C.C. Wu would be present to interpret, I had not brought an interpreter for this informal and intimate interview. The Premier soon entered unattended and we sat down together, smoking cigarettes, and observing an enforced silence, as Mr. Wu had not appeared. We were without an interpreter, but even in such circumstances the perfection of Chinese manners allows no embarrassment to arise. We had been sitting in mute thought a little while, when Admiral Chen, the Minister of the Navy, came in; he spoke English quite well, so that our conversation could begin; soon we were in the midst of earnest discussion. Within another ten minutes Dr. Chen Chin-tao, the Minister of Finance, arrived, and shortly after him came Mr. C.C. Wu. Thus, quite by chance, I had the opportunity of talking over these momentous matters jointly with the representatives of the four departments of government most nearly concerned: Foreign Affairs, Finance, War, and Navy.
We could now once more thoroughly go over all doubts and objections, and look at the proposed policy in all its manifold aspects and probable results. In this intense and earnest conversation no formal interpreting was needed. Whoever replied to my remarks would first repeat in Chinese what I had said for the benefit of the Premier. When the Premier had spoken, Mr. Wu would interpret his thought for me. All the others addressed me directly in English. I advanced arguments on every point, of which the following is a memorandum:
The American Government has taken the present action because the wilful disregard of neutral rights went to the extent of imperilling not only neutral property, but the lives of our citizens. In this matter the interests of China are entirely parallel to those of the United States; both nations are peaceful and see in the maintenance of international right and peaceful conditions a vital guarantee of their national safety. Through associationwith the United States, China would enter upon this controversy with a position consonant with every tradition and interest of her national life, a position which would have to be respected by friends and foes alike, as dictated by the highest principles which could guide national action. By taking this action, China would improve her independent standing among the nations, she would have to be consulted during the course of the controversy and at the conclusion of the war; she would, in all this, be most closely associated with that nation which she has always looked upon as peculiarly friendly and just to her. In addition to these arguments, many favourable results were discussed which China would obtain in international diplomacy.Many arguments were advanced by the Chinese officials in doubt of the policy suggested; it was stated that China had not led up to a breach with Germany by notes of protest, such as had made the action of the United States seem natural and unavoidable; Germany had of late years always been considerate in her treatment of China, a sudden breach might seem treacherous; it might also be taken by Japan as so surprising an action as to give a favourable pretext for pressing the dreaded demands of Group V. It was also apparent that the representatives of the European Allies were not in a position to give China, at the present time, any advice favourable to the action suggested.I pointed out in turn that were the action suggested once taken by China, the representatives of the Allied Powers would have no choice but to applaud it, which some of them, at least, would do from the fulness of their hearts. As far as Japan was concerned, the situation would be such as to indicate that that country, too, would decide to express approval of the action. Having taken a definite position on this side of the controversy, without yet entirely associating herself with the Allies, China would be in a position to command their goodwill; any interference with China's sovereign rights would be rendered more difficult because of the situation thus created. It was almost inconceivable that coercive action should be taken against the friend who had declared himself. Moreover, the United States having taken the initiative in inviting China to participate in the protest, it would be unlikely that any action could be taken over the head of the United States or without consulting the American Government.As to the suddenness of the action suggested, I urged that the action of the German Government in announcing unrestricted submarine warfare was itself so astounding in its disregard of neutral rights that no action taken in reply could be considered too drastic. It was virtually a threat to kill Chinese citizens navigating certain portions of the high seas; and injury could be prevented only by taking a determined and forceful position.
The American Government has taken the present action because the wilful disregard of neutral rights went to the extent of imperilling not only neutral property, but the lives of our citizens. In this matter the interests of China are entirely parallel to those of the United States; both nations are peaceful and see in the maintenance of international right and peaceful conditions a vital guarantee of their national safety. Through associationwith the United States, China would enter upon this controversy with a position consonant with every tradition and interest of her national life, a position which would have to be respected by friends and foes alike, as dictated by the highest principles which could guide national action. By taking this action, China would improve her independent standing among the nations, she would have to be consulted during the course of the controversy and at the conclusion of the war; she would, in all this, be most closely associated with that nation which she has always looked upon as peculiarly friendly and just to her. In addition to these arguments, many favourable results were discussed which China would obtain in international diplomacy.
Many arguments were advanced by the Chinese officials in doubt of the policy suggested; it was stated that China had not led up to a breach with Germany by notes of protest, such as had made the action of the United States seem natural and unavoidable; Germany had of late years always been considerate in her treatment of China, a sudden breach might seem treacherous; it might also be taken by Japan as so surprising an action as to give a favourable pretext for pressing the dreaded demands of Group V. It was also apparent that the representatives of the European Allies were not in a position to give China, at the present time, any advice favourable to the action suggested.
I pointed out in turn that were the action suggested once taken by China, the representatives of the Allied Powers would have no choice but to applaud it, which some of them, at least, would do from the fulness of their hearts. As far as Japan was concerned, the situation would be such as to indicate that that country, too, would decide to express approval of the action. Having taken a definite position on this side of the controversy, without yet entirely associating herself with the Allies, China would be in a position to command their goodwill; any interference with China's sovereign rights would be rendered more difficult because of the situation thus created. It was almost inconceivable that coercive action should be taken against the friend who had declared himself. Moreover, the United States having taken the initiative in inviting China to participate in the protest, it would be unlikely that any action could be taken over the head of the United States or without consulting the American Government.
As to the suddenness of the action suggested, I urged that the action of the German Government in announcing unrestricted submarine warfare was itself so astounding in its disregard of neutral rights that no action taken in reply could be considered too drastic. It was virtually a threat to kill Chinese citizens navigating certain portions of the high seas; and injury could be prevented only by taking a determined and forceful position.
We continued our discussion until nearly twelve o'clock, when I took my leave, thanking the ministers for their courtesy and goodwill. The cabinet sat until six in the evening. Shortly after six I received a telephone call from Mr. C.C. Wu, who said: "I am very happy to tell you that the cabinet has decided to make a protest to Germany, and to indicate that diplomatic relations will be broken off unless the present submarine warfare is abandoned."
It is interesting to remember, as the publication of the Russian secret archives has shown, that on this very day the Japanese Minister for Foreign 'Affairs was urging the Russian ambassador at Tokyo to get from his government assurances of various benefits (including Shantung) to come to Japan if she undertook the supposedly difficult task of inducing China to join the Allies. Japan was thus asking a commission for persuading the Chinese to join the Allies, although they were willing to do so freely of their own accord, as their action this day showed.
The Chinese had made a great decision. These men had acted independently upon their judgment of what was just and in the best interests of their own nation. It was the act of a free government, without a shadow of attempt at pressure, without a thought of exacting compensations on their part. When it is considered in comparison with the manner in which some other governments entered the war, it will stand as an honour to China for all time. Incidentally, this was China's first independent participation in world politics. She had stepped out of her age-long aloofness and taken her place among the modern nations.
I now sent the note to the Chinese Government which contained the simple assurance of fair treatment by the United States. In return I received this promise:
In case an act should be performed by the German Government which should be considered by the American Government as a sufficient cause fora declaration of war, the Chinese Government will at least break off its diplomatic relations with Germany.
In case an act should be performed by the German Government which should be considered by the American Government as a sufficient cause fora declaration of war, the Chinese Government will at least break off its diplomatic relations with Germany.
In his formal note to me, dated February 9th, the Minister for Foreign Affairs declared:
The Chinese Government being in accord with the principles set forth in Your Excellency's note and firmly associating itself with the Government of the United States of America, has taken similar action by protesting energetically to the German Government against the new measures of blockade. The Chinese Government also proposes to take such action in the future as will be deemed necessary for the maintenance of the principles of international law.
The Chinese Government being in accord with the principles set forth in Your Excellency's note and firmly associating itself with the Government of the United States of America, has taken similar action by protesting energetically to the German Government against the new measures of blockade. The Chinese Government also proposes to take such action in the future as will be deemed necessary for the maintenance of the principles of international law.
On the same day a formal note of protest was dispatched to the German minister.
The entire cabinet reported on February 10th to a secret session of parliament on the diplomatic action it had taken. The report was well received; only a few questions were asked concerning the procedure which had been followed. Parliament did not take a vote on this matter, as it was considered to be an action by the cabinet within the range of its legal functions.
A wave of exultation passed over the country. There seemed to be hope for harmony among factions; the self-respect of the Government was visibly heightened. That China had without coercion or sordid inducement taken a definite stand on so momentous a matter inspired the Chinese with new hope. In coming to the support of international right, they felt that they were strengthening the forces which make for the independence of their own country.
Expressing themselves unofficially the representatives of the Allied governments during these negotiations cautiously favoured the step proposed. When the decision had once been taken, the approval of the Chinese action was unanimous. My Belgian colleague remarked to me: "The air hasbeen cleared, a weight has been lifted off China and the powers. The stock of America has risen 100 per cent."
Mr. Sam Blythe gave a dinner on the evening of February 9th, at which Dr. George Morrison and many other American and British friends were present. The dinner became a celebration. Greeting me, Doctor Morrison said: "This is the greatest thing ever accomplished in China. It means a new era. It will make the Chinese nationally self-conscious; and that, not for narrow, selfish purposes, but to vindicate human rights."
But the thing was not yet accomplished. I knew well enough that the decision of the Central Government would not be immediately accepted in all parts of China. Opposition might crop out. In certain regions men of strong German sympathies were in control, or political intrigues to cause embarrassment and difficulties to the Central Government were going on. All China must understand and support the decision taken by the Government.
Of the leaders in the provinces the Vice-President, General Feng, at Nanking, was most important; as the blunder had been committed of not consulting him, he was predisposed against the decision; moreover, General Feng had several German advisers in whom he placed confidence, and who had given him a strong notion of German invincibility.
Fortunately, Mr. Sam Blythe was going to stop at Nanking on his way to Shanghai, in order as a journalist to interview the Vice-President. Blythe argued the matter out with him. He found that General Feng really felt injured. This was smoothed over. With Mr. W.H. Donald as an able second, Sam Blythe impressed upon the General that China had merely been asked to break off relations, which did not imply going to war. After a long and serious conversation, with some side-flashes from Sam Blythe, the Vice-President declared himself fully satisfied, and he came out in favour of the Government's policy. (Thus, as has often been the case,an unofficial visit by private individuals accomplished the good results.)
In other ways and by other persons, different leaders were visited and familiarized with the underlying reasons for the act of the Central Government. These influences interplayed with cumulative effect; no concerted opposition was formed; by a sort of football "interference" the policy to condemn German submarine warfare, and, if necessary, to break relations with Germany, scored its touchdown.
Intelligent teamwork and American energy were in a fair way to give China the backing she needed, having first assured her concerted action with the United States. At a diplomatic dinner which I gave the Minister for Foreign Affairs in February, the absorbing talk was about the diplomatic action taken by China. Count Martel and M. Pelliot of the French Legation, Miles Lampson of the British Legation, Mr. Konovalov, Russia's financial adviser for China, and other Allied representatives all came to me during the evening to say how enormously gratified they were at the initiative of the United States and the stand taken by China. For once nobody could disapprove of Chinese action.
The Japanese also expressed approval, but immediately tried to get China to take the further step of declaring war, and the French minister, too, worked actively for this. Japan was eager to recover the lead. A great campaign of intrigue and counter-intrigue resulted among the various factions in China which threatened to destroy the unifying and inspiring effects of China's action. The question of joining the Allies out and out was thrown into politics. From all this most of the ministers held aloof. When Liang Chi-chao sounded me on this question, I told him, while lacking instructions from my government, that I thought the rupture of diplomatic relations would be enough, if it should come to that. Within a few days instructions came from the State Department to the same effect.
During March I repeatedly saw Vice-President Feng and President Li. Feng, small and slender, intelligent in appearance, bald, with keen but shifty eyes, was courtesy itself. I was specially delighted with the refinement and musical quality of his diction. I went over the whole ground with him, satisfying him, especially, on the question of the specific American objections to the German U-boats. "I approve heartily and completely," he finally assured me, "of the proposed break with Germany."
I found that General Li was not only in favour of breaking with Germany, but of an internal break with his own premier, General Tuan. "I cannot trust him," said Li; "he wishes to eliminate me from real power." This friction within distressed me not a little, as I had sincerely hoped that these two men would come to coöperate.
Then I saw Dr. Wu Ting-fang. Besides being China's foreign minister, Doctor Wu is a spiritualist. When I entered, he followed his usual bent, bundled the morning's business details over to the counsellor in attendance, and devoted himself to philosophizing. Spiritualism, longevity, and the advantages of a vegetarian diet, were to him topics for real thought and speculation. In mystic language, he remarked: "There is an aura gradually spreading from Europe over the entire surface of the world. It enters the brains of the people and penetrates them, making them war-mad. We are having the first signs here."
By March 10th, submarine warfare had not been modified. Parliament then formally approved the breach of diplomatic relations with Germany.
I had almost belaboured the department for instructions during the progress of our work. But it was not until the 13th of March, the very day the break of diplomatic relations was formally notified, that the instructions came. These rather implied that the circular inviting coöperation on the part of the neutral powers had been toostrongly acted upon by me. I could not but be inwardly amused.
When a government takes a step involving life and death and all the interests of its own and of general civilization; when, in connection therewith, it calls upon other powers to associate themselves with it—it ought to be safe to presume that the government means what it says. It should see that the action it invokes involves great sacrifices, and it must not invoke it lightly. A responsible official would not be justified in interpreting such a note in a platonic sense.
At once questions of finance arose. Ancient China had taken her brave step in modern world affairs. She might now have to go to war. That would take money, and money would be needed to guard such a contingency—indeed, internally and externally China had need to put her financial house in order. Yuan Shih-kai's imperialism had left a burden of debt. The Republic required strengthening by a new system of national credit and by the building up of its natural resources. Now the public debt was relatively still small, the rate of taxation upon the hundreds of millions of citizens low. The situation was basically sound. The question had been asked since last summer: Would America supply China with an investment loan of a hundred millions, thus delivering her of lenders who were seeking to dominate her and to split her up into "spheres of influence"?
Minister Wellington Koo, who had journeyed to the United States in behalf of Yuan Shih-kai's imperial ambitions, now worked for the Republic there. I suggested at first that the firm of Lee, Higginson & Company, which still held its option, should complete its loan. This was not done. Then other capitalists were approached and in November, 1916, Doctor Koo arranged for a large loan with Mr. John J. Abbott, president of the Continental and Commercial Savings Bank of Chicago. Mr. Abbott, wishing to study the Chinese financial situation, arrived in Peking during April, 1917, bringinghis lawyer. I got him acquainted with the Chinese ministers, and took him and Mr. Joy Morton, also of Chicago, to lunch with President Li and Dr. Chen Chin-tao and Hsu Un-yuen. The President said: "I will back all financial legislation which American experts may find necessary for the proper organization of China's credit."
Doctor Chen was arrested and put in prison through the plotting of his enemies, but Hsu Un-yuen remained, with his sound financial training. Finally Mr. Abbott proposed an ingenious scheme, with the wine and tobacco taxes as the basis—for every $1,000,000 of annual revenue there should be a loan of $5,000,000; if the taxes amounted to ten millions, they would serve as security for a loan of fifty millions. Mr. Abbott left behind him a plan for reorganizing these taxes, and a promise to take up at any time the question of loans on this basis, in addition to five millions lent the preceding November and an option for twenty-five millions more.
CHAPTER XXII
CHINA'S BOSSES COME TO PEKING
I have noted that Dr. Chen Chin-tao, Chinese Minister of Finance, was put in prison. Doctor Chen had administered Chinese finances strictly and well, in a most difficult period. For the military governors or Tuchuns, who were the real bosses of China's vast population, he was too honest and too strict. The Tuchuns looked upon the Minister of Finance as in duty bound to procure funds for them by hook or crook.
When the government banks were broken and had declared a moratorium, their large over-issues of notes were worth only one half their face value. Working with Doctor Chen was Hsu Un-yuen, managing director of the Bank of China. Mr. Hsu managed judiciously to bring the notes of his bank virtually to par. The Tuchuns, aided by the pro-Japanese clique, which formed part of the Premier's entourage, attacked both Hsu and Doctor Chen. For the latter the cabal laid a trap. It was made to appear that he gave support to a certain company in return for having his brother employed. So the cabal, using this pretext to satisfy their grievances, got him arrested and jailed, thus ending his negotiations with the Chicago bank of John J. Abbott. President Li was interested and distressed. When I asked Premier Tuan about Doctor Chen, he smilingly stated that he should have a chance to clear himself.
Meanwhile, the breach between the Premier and the President widened. To strengthen himself in his policy of favouring a declaration of war, the Premier called all the Tuchuns to Peking for a conference. Nine governors-generalcame, and all the other provinces sent delegates. General Tuan was successful with them, and by April 28th they had decided to support his war policy.