FOOTNOTES:[3]Mr. Liang Chi-chao wrote a characteristic letter of resignation to the President:"On a previous occasion, I had the honour to apply to Your Excellency for leave to resign and in answer to my request, Your Excellency granted me two months' sick leave. This shows the magnanimity and kindness of Your Excellency toward me."The recent state of my health is by no means improved. The 'pulses' in my body have become swollen and I am often attacked by fits of dizziness. My appearance looks healthy, but my energy and spirit have become exhausted. Different medicines have been prescribed by the doctors, but none has proved effective. My ill-health has been chiefly caused by my doctors' 'misuse of medicine.' I have lately been often attacked by fits of cold, which cause me sleepless nights. I am quite aware of the gravity of my disease and unless I give up all worldly affairs, I am afraid that my illness will be beyond hope of cure."In different places in America, the climate is mild and good for invalids. I have now made up my mind to sail for the new continent to recuperate my health. There I shall consult the best physicians for the care of my health. I am longing to spend a vacation in perfect ease and freedom from worldly cares in order to recuperate my health. I am sailing immediately. I hereby respectfully bring this to the notice of Your Excellency."He did not, however, proceed to America.
[3]Mr. Liang Chi-chao wrote a characteristic letter of resignation to the President:"On a previous occasion, I had the honour to apply to Your Excellency for leave to resign and in answer to my request, Your Excellency granted me two months' sick leave. This shows the magnanimity and kindness of Your Excellency toward me."The recent state of my health is by no means improved. The 'pulses' in my body have become swollen and I am often attacked by fits of dizziness. My appearance looks healthy, but my energy and spirit have become exhausted. Different medicines have been prescribed by the doctors, but none has proved effective. My ill-health has been chiefly caused by my doctors' 'misuse of medicine.' I have lately been often attacked by fits of cold, which cause me sleepless nights. I am quite aware of the gravity of my disease and unless I give up all worldly affairs, I am afraid that my illness will be beyond hope of cure."In different places in America, the climate is mild and good for invalids. I have now made up my mind to sail for the new continent to recuperate my health. There I shall consult the best physicians for the care of my health. I am longing to spend a vacation in perfect ease and freedom from worldly cares in order to recuperate my health. I am sailing immediately. I hereby respectfully bring this to the notice of Your Excellency."He did not, however, proceed to America.
[3]Mr. Liang Chi-chao wrote a characteristic letter of resignation to the President:
"On a previous occasion, I had the honour to apply to Your Excellency for leave to resign and in answer to my request, Your Excellency granted me two months' sick leave. This shows the magnanimity and kindness of Your Excellency toward me.
"The recent state of my health is by no means improved. The 'pulses' in my body have become swollen and I am often attacked by fits of dizziness. My appearance looks healthy, but my energy and spirit have become exhausted. Different medicines have been prescribed by the doctors, but none has proved effective. My ill-health has been chiefly caused by my doctors' 'misuse of medicine.' I have lately been often attacked by fits of cold, which cause me sleepless nights. I am quite aware of the gravity of my disease and unless I give up all worldly affairs, I am afraid that my illness will be beyond hope of cure.
"In different places in America, the climate is mild and good for invalids. I have now made up my mind to sail for the new continent to recuperate my health. There I shall consult the best physicians for the care of my health. I am longing to spend a vacation in perfect ease and freedom from worldly cares in order to recuperate my health. I am sailing immediately. I hereby respectfully bring this to the notice of Your Excellency."
He did not, however, proceed to America.
CHAPTER XVI
DOWNFALL AND DEATH OF YUAN SHIH-KAI
Everybody thought that the monarchy was to be proclaimed on New Year's Day, 1916. Disaffection, it was realized, though hitherto confined to a remote province, might spread; delay was dangerous. Business in the Yangtse Valley and elsewhere was dull. Merchants blamed the Central Government, and murmurings were heard. General Feng Kuo-chang, who had at first encouraged Yuan Shih-kai, now reserved his independence of action.
The revolt remained localized in Yunnan throughout January. With the rise of an opposition, Yuan was now more ready to accentuate the constitutional character of the new monarchy. His Minister of Finance, Mr. Chow Tsu-chi, told me that a constitutional convention would be convoked when the monarchy was proclaimed. This would provide a representative assembly and a responsible cabinet. Constructive reforms were to be announced. No further patents of nobility were to be awarded, the titles already granted would be treated as purely military honours.
If Yuan and his advisers had acted boldly at this time in promulgating the monarchy, recognition by a number of powers would probably have followed, especially as the continuity of the personnel of the Government made recognition easier. But hesitation and delay strengthened the opposition. Yunnanese troops had by the end of January penetrated into the neighbouring provinces of Szechuan and Kuangsi. To learn what was going on in these provinces I sent the military attaché, Major Newell, up the Yangtse River to Szechuan, and the naval attaché, Lieut.-CommanderHutchins, to Canton. Efforts of the generals loyal to Yuan to expel the Yunnanese from Szechuan Province were unsuccessful.
After the peculiarly complex manner of Chinese political relationships, Yunnan began to exercise an influence in Szechuan Province which was to last for years. The Yunnanese were protected by natural barriers of mountains; to make headway against them was difficult, even had the troops of the President shown greater energy. How hollow was the unanimity which had been proclaimed in the November elections now became thoroughly apparent. Encouraged by the open opposition, ill-will against Yuan Shih-kai began to be shown in other localities, particularly in Hunan and in the southernmost provinces, Kuangsi and Kuangtung. Rivalries hitherto held in check by Yuan's strong hand also came to the fore. In central China the two men holding the greatest military power, Generals Feng Kuo-chang and Chang Hsun, began to cherish resentment against the President; for, in exchanging notes upon meeting, they discovered that Yuan had set each of them to watch the other.
Even now the monarchical movement might have gained strength from the moderates, who feared the Japanese. They did not wish to see the national unity disrupted. "Get a constitution and a representative legislature," they advised Yuan Shih-kai; "put in play a constructive programme of state action; reform the finances and the audit, simplify the taxes, extend works of public use, build roads, reclaim lands, develop agriculture and industry, and all might yet be well." Mr. Liang Shih-yi and Mr. Chow Tsu-chi hoped, once the question of succession was definitely settled, to "put in commission" the dictatorial power of Yuan. As Mr. Chow this time put it: "Yuan will have the seat of honour but others will order the meal."
Toward the end of January the formal proclamation of the empire was further postponed. Mr. Chow Tsu-chi wasto go on a special mission to Japan, probably to induce the Japanese Government to be more favourable to the new monarchy, and to bear handsome concessions to the Japanese. But the Japanese Government declared that for personal reasons the Emperor of Japan could not receive a Chinese embassy at that time. Possibly various other concessionaire governments intimated to Japan that they did not expect her to entertain any special proposals at this time. Nevertheless, the Japanese must have made strong representations to cause Yuan Shih-kai, who was a decisive and determined man, to risk all by hesitating at this critical moment.
To present some Americans I called on Yuan Shih-kai on February 16th. Mr. and Mrs. Ulysses S. Grant were visiting Peking, and Yuan was glad to have me present the son of the famous American President who had himself visited China and established cordial relations with Li Hung-chang, Yuan's great master. Significantly the President said to Mr. Grant: "Your honoured father had great power, but he could safely resign it to others when the time came. You have great political experience in the West." It was quite a little party, including the newly appointed commercial attaché, Mr. Julean H. Arnold; the commandant of the guard, Colonel Wendell C. Neville; and two young writers, Miss Emerson and Miss Weil, who have since devoted themselves to Far Eastern studies and literary work. While the Emperor-elect betrayed traces of strain and worry, he had his accustomed genial manners. Apropos of the commercial attaché and the commandant he made a little pleasantry about commerce and war coming hand in hand. After a brief interview the visitors were taken by the master of ceremonies to see the gardens, while I remained with Yuan Shih-kai for a long conversation. This was interpreted by Doctor Tenney and by Dr. Hawkling L. Yen, of the Foreign Office; it was understood by us all that the conversation was personal and unofficial.
"I have not sought new honours and responsibilities, butnow that a course of action has been formally decided upon, it is my duty to carry it out," Yuan said. "The people coöperated in this, I desire that they shall coöperate at all times."
I asked how soon he would announce definitely his constitutional policy. I had some doubt as to how far he intended to apply any, and his answer was evasive. "It is hard," he replied, "to make a constitution before the monarchy is actually reëstablished. Then, too, if the Emperor heads the Government, the powers of departments under him would need to be more restricted than under a republic." His advisers, it seemed, were unduly optimistic in expecting Yuan to stand squarely for constitutional government, with power devolving on the parliament and the different departments. I reminded him of the British monarchy in its various historic forms to refute his idea.
"Well," he responded, "the new constitution must wait for a People's Convention. This is soon to be called; its action must not be in any way anticipated."
He then fell back on his record, stating that he had pressed the Manchu Government to adopt a constitution. He also referred to the title chosen for his reign, "Hung Hsien," which means "great constitutional era."
A mandate of February 22nd announced the postponement of formal accession to the throne. Mr. C.C. Wu, who brought me information concerning certain state plans of Yuan Shih-kai, said that this mandate would put an end to the innumerable petitions sent to accelerate the formal coronation. He added that essentially the Government, so far as domestic matters were concerned, was already a monarchy, that only in its international aspects had it failed to assume this character.
Suddenly, on March 18th, the Province of Kuangsi demanded the cancellation of the monarchy; events were moving more rapidly.
At this juncture I had to decide whether to allow the Lee Higginson loan to be completed without a caution or warning, or to assume responsibility of virtually stopping that transaction. As soon as it became clear that open opposition to Yuan Shih-kai's government was no longer confined to one province and its immediate sphere of influence, it seemed no longer proper for any American institution to furnish money to the Chinese Government. Many appeals had been made by the Opposition based on the demand that, since the country was divided, no loans should be made to the Government. In ordinary circumstances the protests of factions would not have weight, but when several provinces expressed their disapproval of a basic governmental policy the case was different. To have to counsel delay in execution of the loan agreement was intensely disappointing to me, fervently as I had wished the American financiers to participate in Chinese finance, in order that credit and resources might be organized and developed for the benefit of all. Unfortunately, in the lull after the disposal of the twenty-one demands the Chinese had immediately embarked on this doubtful political enterprise, consuming precious energies and money. The sums spent on military expeditions, in favourably attuning doubtful military leaders, and in the creation of the alleged unanimous consent through a popular vote, had been thrown away. They merely added to the burdens carried by the Chinese people.
With the disaffection of yet more provinces the Government on March 22nd promulgated a decree cancelling the monarchy, and announcing that Yuan Shih-kai would retain the Presidency of the Republic.
This sudden and unilateral concession, without a guaranteedquid pro quoby way of submission to the Central Government by the revolting forces, came as a surprise. Doubtless the step was taken because the President feared that the Province of Kuangtung, whose military governor had urgedhim to compromise, would join the revolutionaries. Moreover, the former Secretary of State, Hsu Shih-chang, who had been in retirement, advised it. The Anhui Party in Peking saw an opportunity to regain control and oust the Cantonese leaders, in whose hands the monarchical movement had been since August. The President believed that the return of such men as Hsu Shih-chang and Tuan Chi-jui would strengthen him in the eyes of the revolutionists. Hsu Shih-chang personally had lived up to the canons of Confucian morality in failing to approve the action of Yuan Shih-kai when he tried to assume the rank of his former master, the Emperor. This gained him universal respect in China. But his impelling motive was personal loyalty to the old Imperial Family rather than attachment to its government.
Of course, the cancellation of the monarchy failed to satisfy the revolutionists. They interpreted it as a confession of weakness and defeat. Nor was it more welcome to the adherents of the President in the provinces, especially the military, who felt that he was surrendering without getting anything in return. Thus the President lost his friends and failed to placate his enemies. Had the southern leaders been content, the chastened Yuan might have been satisfied to be formal head of a constitutional government. But they were not. His authority and prestige had been too gravely compromised; revolutionists were appearing in various parts of China; Tsingtau was being used as a base for revolutionary activities in the Province of Shantung with connivance of the Japanese authorities. The Peking Government was thrown into confusion. The official world was apprehensive as to what the President would do, while the foreign community feared military riots.
The leaders of the so-called Anhui Party had evidently expected that it would be easy to proscribe the Cantonese leaders, Liang Shih-yi, Chow Tsu-chi, lately Minister of Agriculture and Commerce, and Chu Chi-chien, Minister ofthe Interior, and have them banished or executed. But contrary to their expectations these men did not at that critical time take to the woods. To the amusement of everyone, the leaders of the other party then became frightened and began to remove their families from Peking and to plan for places of safety for themselves. With somewhat grim humour, Minister Chu Chi-chien declared that as conditions in Peking were perfectly normal, and as any unwarranted show of nervousness by officials would tend unnecessarily to disturb the populace, officials would no longer be permitted to remove their families from the city.
It now became a question whether Yuan Shih-kai could remain even as President. I had a conversation with Mr. Hioki, the Japanese minister, who spoke at length about the shortcomings of Yuan, and his tendency to use all the functions of state, including particularly the financial, to satisfy his personal ambitions. Mr. Hioki did not believe that Yuan Shih-kai could possibly restore his authority. The month of April was a period of great depression in Peking. All constructive work, and even planning therefor, had been entirely suspended. The new ministry came in on April 24th, under General Tuan Chi-jui as Minister of War. This fact indicated shiftings of power, as General Tuan had never supported the President in his imperialist ambitions. The Cantonese leaders stepped out of the Government, maintaining their influence thereafter by the familiar methods of Liang Shih-yi. Mr. Tsao Ju-lin, who belonged to the Communications Party, but had been specializing in establishing closer relations with the Japanese, became Minister of Communications. The President agreed to turn over to the cabinet full governmental powers, and to make the ministers responsible to the national parliament, which was to be summoned forthwith. Yuan ceased his personal control over all important branches of the Administration. The control of the army was transferred from the President to the Board of War. Hewas stripped of all military forces but his Honanese bodyguard, which numbered about twenty thousand.
The name of Yuan Shih-kai, however, was retained as a symbol of authority, for all the military leaders owed him allegiance. Mr. Liang Shih-yi, as president of the Bank of Communications, still controlled the finances, and his associate, Mr. Chow Tsu-chi, was placed in charge of the Bank of China.
The Government was driven to such extremes by its financial needs that in May the cabinet declared a moratorium suspending specie payments on notes of the government banks. The term "moratorium," which had just then come into prominence in Europe, was greeted by the Chinese financiers as the password to save them—a respectable name for what was otherwise not so honourable. Through this step, whatever confidence still remained in Yuan Shih-kai was dissipated. Because of the complex nature of Chinese affairs peculiar consequences followed. Thus, the postal administration offices and those of certain railways independently announced that they would not accept notes but would demand payment in silver.
All reports of local troubles coming from reliable sources in various parts of China spoke of the participation of Japanese in revolutionary activities. Specific reports from Shantung indicated that the revolutionaries there were favoured by the Japanese. At Tsingtau bandits had come over from Manchuria and were openly drilling early in May under the noses of the Japanese military. About a thousand of these rebels left Tsingtau on May 4th over the Shantung railway, carrying machine guns to the centre of the province, where they took part in the disturbances. Meanwhile, the same railway, under Japanese control, had refused to carry Chinese government troops on the ground that neutrality must be maintained. When questioned about the rebels transported, the railway officials stated that the rebels must have been incivilian clothes and must have carried their armament as baggage.
It is not clear whether the Japanese were systematically working for the establishment of an independent government in the south, or whether they were merely covertly encouraging opposition to the Central Government, to foment division and unrest. But the plans of Japan for gaining a dominant position in China were certainly favoured by the final breakdown of the authority of Yuan Shih-kai.
Japanese correspondents at this time started the report that Chinese merchants in the Yangtse Valley were so provoked with Americans for making a loan to the Chinese Government—the Lee Higginson loan—that they were planning a boycott against American goods. The Japanese paper,Shun Tim Shih Pao, incidentally drew on its imagination, and published a yarn to the effect that in addition to the $5,000,000 loan already agreed to, the American firm had promised to hand over to the Peking authorities $15,000,000 before the end of July. As a matter of fact, beyond the original payment of $1,000,000, nothing was ever paid over. The Chinese did not take up the suggestion of a boycott; although, had the making of the loan proceeded, such a result might have followed. In Peking, on the other hand, the Japanese tried to impress upon Chinese officials that the non-completion of the Lee Higginson loan offered new proof that Americans could not be relied upon when it came to a showdown.
Throughout this difficult period the European Allied Powers felt that they lacked a free hand, and that any joint action undertaken might easily assume such form as to create a Japanese hegemony. The Japanese at all times urged that as they were on the spot it would be only natural to entrust them with the representation of the interests of the Allies. Many representative Europeans in China plainly intimated to us the hope that the American Governmentmight show a strong interest in Chinese affairs, and might not fail to insist on the maintenance of existing treaty rights and of Chinese sovereignty.
I knew from the Chinese who saw him daily that Yuan Shih-kai suffered under the strain of his troubles and disappointment. As early as March Mr. Liang Tun-yen besought me to visit the President and give him encouragement, as worry and despair were breaking him down. Yuan had lived a sedentary life of intense work and great responsibility. He had developed Bright's disease, but his strong constitution had fought it off. Now when great trouble beset him his strength failed. Mr. Chow Tzu-chi remarked to me: "The President's power of quick decision has left him; he is helpless in the troublesome alternatives that confront him. Formerly it was 'yes' or 'no' in an instant, to my proposals. Now he ruminates, and wavers, and changes a decision many times." Yuan contemplated resignation, and seemed taken with the idea of visiting America. I was sounded as to giving him safe conduct and asylum. The Opposition, it seemed, would make no objection to his leaving the country. He was confined to his room during the latter half of May, but continued to give his personal attention to telegrams and important correspondence. In the first days of June his health seemed to improve. I went with my family to Peitaiho to instal them in their summer residence, and to rest for a few days. I had left a special code with Mr. MacMurray, in which the wordPanstood for Yuan Shih-kai. I was shocked on the afternoon of June 6th to receive the brief telegram: "Pan is dead."
By the night train I returned to the capital. Yuan's sons, the ex-Premier Hsu Shih-chang, and several officials close to the President, were with him when he died. During the night he had made solemn declaration to the ex-Premier that it had not been his wish to become Emperor; he had been deceived into believing that the step was demanded by thepublic, and was necessary to the country. After saying this he seemed exhausted, and continued to sink until the end came. He had weakened himself and further aggravated his illness by indiscriminately taking medicine prescribed by a foreign physician together with all sorts of Chinese remedies which his women urged upon him.
The ministers of the Allied Powers at once called on General Tuan to inquire whether the Government was prepared to prevent disorders. Some time previously the Japanese minister had asked me whether I would consider it suitable for the diplomatic corps, in the event of danger of disturbances, to make such an inquiry. I felt it unnecessary and undesirable, as it might cause apprehension among the public.
The German and Austrian commandants were included in the conference to agree on measures of protection—probably the only instance during the war where the belligerents of both sides met to consider common action. Subsequently the Belgian minister requested the American Legation to take over the patrol of the city wall immediately back of the Belgian Legation, which had thus far had German sentinels. It illustrates the complexity of all things in China that, as late as 1916, German troops were concerned in the formal protection of the Belgian Legation.
Yuan Shih-kai before his death wrote a declaration to the effect that in the event of his disability the Presidency should devolve on General Li Yuan-hung. The accession of the Vice-President was announced immediately. The members of the cabinet, as well as Prince Pu-Lun, as chairman of the State Council, waited on President Li on the 7th of June; with a simple ceremonial, including three deferential bows, the cabinet expressed its allegiance to the new President. He was accepted peaceably and with unanimity by all the provinces.
General Tuan Chi-jui and Mr. Liang Shih-yi coöperated inarranging for the transfer of authority to the new President. That this was done so quietly and in so orderly a fashion caused the foreigners to regard Chinese republicanism with much higher respect.
The body of Yuan was not transferred from Peking to his Honan home until June 28th, when the mausoleum on the ancestral estate was ready. As part of the Imperial movement, Yuan Shih-kai had previously begun the construction of this large tomb. The commemorative ceremony took place on the 26th in Peking. The great hall of the Presidential palace, where we had often witnessed New Year receptions and other festivities, was used. There were gathered the foreign representatives with their staffs and the high officials of the Chinese Republic. It was a strange mingling of old and new. The President's body lay on a high catafalque, in the very place where he had so often received us. In front of the entrance to the inner apartments stood rows of tables bearing the usual funeral offerings as well as the weapons, clothes, and other objects of personal use of the departed. Here were gorgeous Mandarin coats of the old régime, including the famous Yellow Jacket, and generals' uniforms of the new, and innumerable decorations sent by all the countries bestowing such honours; also tall riding boots, soft Chinese slippers, long native pipes and foreign smoking sets, swords, and pistols.
The service was a litany conducted by Lama priests from temples in Peking and Mongolia. Some of the priests wore a huge headdress resembling a dragoon's helmet; others, a large round hat not unlike that of a cardinal. As they intoned the ritual their deep voices rolled as if they issued from an underground cavern. The music accompanying the singing was Chinese, supplied by flutes and stringed instruments; but at the beginning the President's band had played a Western funeral march. The second part of the service consisted of the burning of incense in memory of the departed.First, the sons of Yuan, wearing the white garments of mourners, came forth from an inner apartment and took their station before the catafalque. They prostrated themselves, struck their foreheads heavily against the floor, and wailed with loud voices. Yuan Ko-ting, as chief mourner, offered sacrifice. Meanwhile, the women of the Presidential household peered through the windows of the apartments which opened into the central hall.
When the sons of Yuan had withdrawn, the singing of the priests was taken up again, now in a different key and accompanied by the tinkling of many bells clear as silver, but some of them as deep as the sea. Buddhist prayers were intoned in voices sonorous and deep as the grave. The new President next offered sacrifice at the bier of his predecessor.
What contrasts of character and aims, what mingling of old and new forces, what a rush of incongruous ideas and practices were typified in this ceremony, with all its accompaniments! And these were embodied, too, in the personality of the dead leader and in his successor!
The foreign representatives next paid their respect to the memory of Yuan. We rose and each in turn deposited before the catafalque a huge wreath, and returned after making the customary three bows of high ceremony. Following the diplomats came the Secretary of State and high Chinese officials, as well as the foreign advisers.
The procession to the railway station, on June 28th, testified to the genius of the Chinese for pageantry. They had preserved some of the colour and brilliance of an Imperial procession, and what was remarkable, had so arranged the parade that the modern elements—troops in modern uniform, brass bands, officials in evening dress, and diplomats in their varied uniforms—myself alone wearing ordinary civilian dress—did not impart to the pageant a jarring note. In fact, throughout the ceremony at the palace and the subsequent procession, there was a gratifying absence of dissonance, notwithstanding the multifariousness of the elements included.
The huge catafalque upon which the body of Yuan lay was borne by a hundred men by means of a complicated arrangement of poles. It was covered with crimson silk embroidered in gold; its imperial splendour accentuated the tragedy of the occasion. Old Chinese funeral customs, such as the throwing into the air of paper resembling money, were observed. Heading the procession rode twenty heralds, then followed in succession three large detachments of infantry, bearing their arms reversed. Between each two detachments marched a band. After the infantry came Chinese musicians, playing weirdly plaintive strains on their flutes. Then came the beautiful and fascinating part of the cortège—a large squadron of riders in old Chinese costume, carrying huge banners, long triangular pennants, and fretted streamers of many colours, which, as they floated gracefully in the air, made a charming picture. The Chinese have a genius for using banners with dazzling effect. Then followed lancers escorting an empty state carriage; Buddhist monks beating drums and cymbals; the President's band; long lines of bearers with sacrificial vessels preceding the sedan chair in which was set the soul tablet of Yuan; then still other lines of men bearing the food offerings, the mementoes of Yuan's personal life, and the wreaths, all from the funeral ceremony of two days before. High officials came next, on foot, in military uniform or civilian full dress, and here indeed the frock coats and top hats did seem somewhat out of keeping. A throng of white-clad mourners preceded the catafalque; the sons of Yuan walked under a white canopy. Yuan Ko-ting in the midst of it all seemed a pathetic figure.
The vast throngs that lined the route behind lines of troops looked on in respectful silence. There was no sign of grief, rather mute indifference. Yuan had not won the heart of the people, who regarded him as a masterful individualdwelling in remote seclusion whose contact with them came through taxes and executions. I believe a Chinese crowd is incapable of the enthusiastic hero-worship which great political leaders in the Occident receive. The people have not yet come to look upon such men as their leaders. The Peking population, imbued still with traditions of imperial splendour and the remoteness and semi-divinity of their rulers, are as yet only onlookers at the pageant of history.
The tragedy of the great man who had died as a consequence of his ambition made this occasion impressive to the foreigners present, even to the most cynical. It was the last act in one of the most striking dramas of intrigue, achievement, and defeat. The foreign representatives left the cortège before it issued from the southernmost gate of the Imperial City, stopping while the mourners and the catafalque moved past. A piece of paper money thrown into the air to pacify the spirits fell on me, and I kept it as a characteristic memento. I walked back to the Legation Quarter with the Russian minister, Prince Koudacheff, who, like myself, was deeply impressed; we agreed that in ceremony and pageantry the Chinese stand supreme.
Thus, with the fluttering of bright banners and the wailing of the reed flutes, another crowded chapter in the history of the new China drew to its close.
CHAPTER XVII
REPUBLICANS IN THE SADDLE
The passing of Yuan Shih-kai left the ground clear for the nurturing of a real republic in China. Would those in control be real republicans, or would they be merely politicians? Politics, with all that this term implies in modern times, was exotic, its importation into China might have disastrous results. Concentration on industry, on local government by the Chinese people, and the building up from these of a sound and democratic national consciousness were needed. It was upon this foundation that Li Yuan-hung might have founded his rule.
His first reception to foreign ministers was given by President Li Yuan-hung shortly after the funeral of Yuan Shih-kai. Li had removed from the island in the Imperial City before the death of Yuan; and this was a step toward freedom, though he had continued to be surrounded with guards ostensibly for his protection, but really there to watch him and restrict his movements. His friends were still apprehensive for his safety, and I was repeatedly approached with inquiries as to whether in case of need I should receive him at the American Legation, or possibly, even, send a guard detachment to bring him in. The latter I could not do; but, while it is not proper to give specific assurances of protection in advance, I could say that it was customary to grant asylum to political refugees. I learned that some Americans were ready to try a rescue of the Vice-President should his situation become perilous. Upon the death of Yuan Shih-kai, General Li's situation of uncertainty and danger was ended at least for a while.
He received the diplomats in a private residence, whence he did not remove to the palace for several months. The ceremony was simple. The foreign representatives were introduced in three groups: Allies, Neutrals, and Central Powers. The President received us standing, attended by his ministers and twelve generals, all in uniform. General Tuan Chi-jui looked disconsolate, standing with bent head and with epaulets sloping down on his chest. I do not know whether his spirit was as sad as his outward demeanour, but he probably saw many difficulties ahead. The President made a few remarks of a friendly nature, but throughout he looked far more serious than was his wont; and his face was not wreathed in smiles.
On the afternoon of the day of Yuan's funeral I visited the new President informally; passing through several interior courts where soldiers were on guard and through a smiling flower garden I came into the library, simply furnished, where the President was working. Piles of papers and books on the desk and side tables indicated that he had been seeking information from many sources. We spent an hour or so discussing the political situation. He felt relieved at being no longer guarded and confined; but his newly acquired state had not changed his simplicity of manner. Quite in his usual optimistic mood, he said: "I have found a way to secure the coöperation of all factions. I will declare the Provisional Constitution of 1912 to be in force, and summon the old parliament; but its membership should be reduced by one half; it is too unwieldy. It will be summoned for this purpose only and to finish the Constitution; the reduction will come by amending the parliamentary election law."
I asked the President whether he did not consider it impossible thus to limit the function of the parliament, when once it was summoned. Would it not, I asked, almost certainly try to assume a controlling power in the Government,and would not this, in the absence of mature leaders, cause confusion?
"No," the President insisted; "the parliament will be confined to the specific function indicated by me."
As the community of Americans at Shanghai had repeatedly invited me to come to that city, I carried out a long-delayed intention by journeying southward to celebrate the Fourth of July there. My chief engagement—following, among others, an address at the Commencement exercises at St. John's University, an American University Club lunch, a reception given in my honour on the FlagshipBrooklyn—was an address before the American Chamber of Commerce at dinner in the Palace Hotel, on July 1st. I spoke about the requirements of the new period upon which American commercial interests in the Far East were entering. In European countries and Japan, I said, the relation between the Government and the large industries and banking institutions is close. Together they develop national enterprise abroad. Not so in America. The Government and the concentrated capital of the United States do not act as a unit in foreign affairs. We believe that it is better to leave the initiative to private enterprise, confining the action of the Government to protecting opportunities for commerce abroad. In their work of organization, American merchants and representatives have the function of discovering, testing, and approving commercial policies and projects which are to be executed with home capital. On their wisdom and experience in China, New York and Chicago have to rely.
At the reception given by the Consul-General in Shanghai on the Fourth of July, I met Mr. Tang Shao-yi, the Kuo Min Tang leader who had been Premier and Minister of Finance in the first cabinet under the Republic. I found him unprepared to assume any responsible part in politics, although the prominence of his opposition to Yuan Shih-kai might have made him ready to help. As President Li had urged him tocome to Peking, Mr. Tang said he would go when parliament had been reconvoked. But I apprehended and understood from others that he was loth to go because his enemies in Peking were still too powerful.
After a brief vacation at the summer residence of my family at Peitaiho, whither I had proceeded on the U.S. shipCincinnati, I returned to Peking on the 27th of July, as much business awaited me there.
A change of government took place. The appointment of a new cabinet was announced on June 30, 1916, with a personnel completely different from that under Yuan Shih-kai. Mr. Tang did not leave Shanghai. A provisional cabinet was therefore constituted under General Tuan Chi-jui, Dr. Chen Chin-tao acting as Minister of Finance and Mr. Hsu Shih-ying as Minister of Communications. I had long known Doctor Chen, who had received his education in the United States and had lived abroad many years as Financial Commissioner of the Chinese Government. He was one of the few men in Chinese official life familiar with Western finance and banking—a scholarly man, slow and somewhat heavy in speech and manner, studious, and desirous of carrying modern methods of efficiency and careful audit into all branches of the Administration. Everyone met him with confidence.
The southern leaders did not come to Peking because they wished their complete ascendency to be recognized before taking part in the Government. Their demands that the Constitution of 1912 be revived and that Parliament be restored had been complied with. They further insisted on punishment for the leaders of the monarchical movement. Accordingly, on July 13th a mandate was issued providing for the arrest and trial of eight public men, including Liang Shih-yi, Chu Chi-chien, and Chow Tsu-chi. All of these men happened to be beyond the jurisdiction of the Chinese Government, so the mandate had the effectonly of a decree of exile. General Tuan, the Premier, smilingly remarked in cabinet meeting that if the monarchists were really to be punished, few men in public life would go free.
With an entirely new personnel of government, all threads of negotiations, past and present, had to be taken up anew. I was already acquainted with the Premier and with Doctor Chen, but the other cabinet members I had met casually or not at all. With Doctor Chen and his associate of the Ministry of Finance, Mr. Hsu Un-yuen, who had been appointed managing director of the Bank of China, and with General Hsu Shu-cheng, the Premier's chief assistant, I frequently talked over the financial situation of China. The monarchical movement had been defeated, the Republic more firmly established; now, they suggested, it was highly appropriate for America to support China financially. They requested that the loan contract made by Lee, Higginson & Company be carried out, and further steps taken for strengthening and organizing Chinese credit.
I told the Premier about the railway and canal negotiations. He wished to encourage American participation in Chinese development, but did not commit himself on the new American proposals. On the matter of a loan he reënforced the position taken by the Minister of Finance and General Hsu. General Tuan had won the confidence of the Chinese people through his disapproval of Yuan's monarchical ambitions, and now occupied a strong position. "I do not expect much good," he said, "from the return of parliament; there will be endless party struggles and interference with the Administration. But as to this curious modern method of governing through talk, which fundamentally I see no virtue in, I am willing to give it a fair trial."
When I called on the Minister of Communications, I took care that the conversation should be, not on business, but on literature and the surroundings of Peking. He likedcalligraphy; also, he had written short literary pieces, one of which was a poetical description of the Summer Palace. After a pleasant hour with tea the minister escorted me not only through all the various gates of the inner courts, but to the very door of my carriage. One of my colleagues on his initial visit to the minister had a less fortunate experience. The interview, which concerned a certain action long delayed, was somewhat spirited, for the diplomat insisted with great emphasis that something be done forthwith. By contrast the minister made me specially welcome, pleased that I did not immediately descend upon him with demands. When, thereafter, matters of business had to be taken up, there was the same cordiality, even when difficult things were discussed.
During the first month of its renewed life, beginning the 1st of August, the parliament did nothing to justify the unfavourable expectations of its critics. It was not rash or irresponsible, its members subordinated their private and partisan views to the urgent needs of national unity and coöperation. The military party pursued a waiting policy, seeming ready to give parliament a chance to show what it could do. Meanwhile, the financial situation of the Government became difficult, as the provinces had not yet been prevailed upon to give adequate support.
Among the newly arrived leaders of the democratic party whose abilities and character I was appraising was Mr. Sun Hung-yi, the Minister of the Interior. I went to him, passing through narrow and crooked streets to his house in a remote part of the city. It was surrounded by military guards, carriages, and automobiles. The courts swarmed with people; soldiers were lounging about, while countless long-coated individuals hurried to and fro or sat in conversation in the rooms or on porches. Mr. Sun, who met me in an interior apartment, was tall, broad faced, with sparse whiskers and hair standing up rebelliously in wisps. Hewore a long brown coat, bestowing little care on his appearance. "The parliament," he said, "cannot confine itself to its principal task, the finishing of the Constitution; it must also control public administration."
A contest for power was inevitable, it seemed, between the Premier and the parliament.
Mr. Sun was a typical politician. Here he was, his innumerable retainers about him, all intent on the game, while he was cunningly deploying his forces for tactical advantage in politics. He betrayed no ideas of statesmanship, only a desire for party dominance; though later he did show signs of developing a broader vision.
I also met Mr. Ku Chung-hsiu, the Minister of Agriculture and Commerce, a most complacent and oily person, who would be recognized the world over as the suave political manipulator.
Of such calibre, then, were the men who, under President Li Yuan-hung, were to lay the foundations of the new government.
PART III
THE WAR AND CHINA
CHAPTER XVIII
AMERICAN ENTREPRENEURS IN PEKING
As the second year of the Hwai River conservancy option was about to expire, something positive had to be done in order to make an actual beginning on this work. Mr. W.F. Carey, whose various enterprises have already been referred to, had arrived in Peking in December, 1915, with his family and a large staff. He brought over his whole organization, for his firm's arrangements with the New York capitalists made him feel ready, not only to negotiate, but to start work. He had completed extensive railway construction work in Canada and the United States; his organization was ready for China. He was a man accustomed to attacking his work with full force and getting it out of the way. He knew there was plenty of work to do in China, and he was ready to start doing it without delay.
Tested and highly recommended as the conservancy undertaking had been by the engineering commission under Colonel Sibert, the financiers associated with the Siems-Carey Company yet hesitated. It was then suggested that they do part of the work and reserve an option on the entire enterprise. The negotiations with Mr. Chow Tsu-chi, Minister of Finance, developed that the only part which might be dissociated from the whole was the restoration of the Grand Canal. But it would hardly be profitable to undertake this unless at least the whole portion from the Yangtse River to Techow were to be made navigable. Enough traffic might then be counted upon to afford by means of tolls security for the loan, together with certain tracts of land which would be drained. A period of four months was givento investigate the feasibility and cost of this work, while the option on the more extensive enterprise of the Hwai River conservancy was extended.
The men representing American firms who came with Mr. Carey created in Peking the impression of an onslaught of American enterprise. The International Banking Corporation and the American International Corporation had sent a new representative. The firm of Anderson, Meyer & Company, hitherto Danish, had been acquired by American capital, and a representative had been sent to Peking. Social life in the American colony was visibly enlivened by this influx. It was amusing to see how large groups of people from St. Paul, Kansas City, Chicago, and various Eastern towns, suddenly planted in these entirely foreign surroundings, could in an incredibly short time make themselves thoroughly comfortable, and establish intimate relations with their new neighbours. The various American representatives took large houses in the city outside of the Legation Quarter, where they entertained a great deal.
But by the legal talent mustered for the negotiations the Chinese were rather taken aback. Not much given to legal refinements, nor to setting down in the written contract detailed provisions for every imaginable contingency, the meticulous care of the American legal draughtsmen impressed the Chinese as savouring of suspicion.
Their own business arrangements are more simple and general, with reliance on a mutual sense of equity; moreover, all contracts with foreigners had hitherto been made in a less technical manner. An American lawyer would not be satisfied with this. He would think of the other corporation lawyers at home, sitting in their offices on the thirty-fifth floor, to whom the ordinary Chinese way of drawing up contracts would seem criminally lax. To overcome the concealed resentment of the Chinese took time, together with much talk about how the common interest would be promoted by completely defining all responsibilities assumed. The argument which really impressed them was that other foreign nations had frequently interpreted simply drawn contracts entirely to the disadvantage of the Chinese.
Mr. Carey, also, did not personally believe in much legal refinement, but bowed to the mature judgment of the profession. He had won his way from the ranks, and his Irish originality had not been befogged with theoretical discussion. He immediately felt at home with the frank and human Chinese, and constantly had many of them at his house, where they partook of true American hospitality and shared in frolics of dancing and poker. The Chinese are fond of this American game, in which human nature plays so large a part; the impassiveness of their countenance lends itself admirably to the tactics of poker. It was amusing to hear Liang Shih-yi, who otherwise spoke not a word of English, enunciate from behind a pile of chips, in staccato tones: "Full house,"—"Two pair." This eminent financier was a worthy match for any poker expert.
Mr. Carey brought his unwarped intelligence to bear with great freshness on Chinese affairs, which he discussed in the language of an American contractor and business man who reduced everything to terms of getting something done. To observe how a man of his training, instincts, and tradition, so utterly different from the Chinese, remained in constant, intimate intercourse and joyous mutual understanding with them, made one believe that there must be real bonds of sympathy between Americans and the Chinese. Mr. Carey abbreviated many of the Chinese names, thus making them far more pronounceable. Mr. Chen Pan-ping, the Minister of Agriculture, thus became Ping-pong; the Secretary of State, Hsu Shih-chang, was Susie.
When the preliminary contract for the Grand Canal had been signed, Mr. Carey and all his associates departed for Shantung and Kiangsu under the guidance of Mr. Pan Fu, ayoung capitalist and official from Shantung Province, who was anxious to have the constructive work begun early.
A mistake made by Americans in other parts of the world was not avoided in China. Several of the new organizations that came in at this time and during the war made their entry with a considerable blare of trumpets and pounding of gongs, announcing the millions that were backing them and describing the manner in which they would rip things up generally when they got started. As a great part of international business is diplomacy, such methods of blatant advertisement are not best calculated to facilitate the early operations of a new enterprise. They raise expectations of "easy money" in the people dealt with, and they engender cynicism and rock-ribbed opposition on the part of competitors. Great enterprises in foreign trade are usually built up with quieter methods. My observations on this score by no means refer to all new American enterprise in China, but there was enough of this sort of brass-band work to give people an idea that it was the approved method of American entry into foreign markets. The subsequent flattening out of several of these loudly heralded ventures did not help matters.
I had on February 29th a long interview with Dr. Jeme Tien-yow, an American-educated engineer, who had won repute through the survey and construction of the Peking-Kalgan Railway, of which he was chief engineer. He was looked upon as a living example of what the Chinese could do for themselves in engineering. At this time he was managing director of the Hukuang railways. I had had extensive correspondence with him, directly and through the Consul-General at Hankow with respect to the engineering standards to be applied on his lines, as it was difficult to find a middle ground between the American and British manufacturers and those of other nations concerned. Doctor Jeme was on the whole favourable to America, but clung to Europeanstandards, much to the disadvantage of American equipment. We went over all the disputed points with regard to solid cast wheels or tread wheels, shapes of box cars, types of engines, and so on—a curiously technical conversation for a foreign minister to hold with a railway director as a matter of official business. Doctor Jeme was slow, undemonstrative, quite willing to discuss, but not ready to yield any point in which he thoroughly believed. The argument cleared up some matters and left others the subject of continued correspondence.
I was trying to induce the American group to take the lead in furnishing funds so that the building of the Szechuan line of the Hukuang railways could be undertaken. I also hoped that, notwithstanding the war, the British and French groups might continue to furnish enough funds to complete the line from Hankow to Canton.
Doubtless the greatest national need of China was the completion of these trunk lines, both to connect the north and south of the country, and to open a land route to Szechuan Province, which could then be reached only by boat on the Yangtse, subject to all contingencies of an uncertain and dangerous navigation. It should not have required argument to induce the capitalists to advance money for a short railway which would open an inland empire of forty millions of people, especially when they had already bound themselves by contract to furnish the funds.
The $30,000,000 originally advanced had been spent, without more than two hundred miles of actual construction to show for the vast sum. This was due partly to the need of buying out earlier Chinese companies at extravagant figures, but also in large part to the cumbersome and expensive organization of this international enterprise. Only by actually finishing one of these basically important lines and putting it in operation could the money already expended be made to count.
At home the group seemed favourable to going ahead to the completion of the work. Mr. Willard Straight in February went to London to seek the consent of the British and French partners. But beyond settling some minor details about alignments no definite result was secured. Chinese development was blocked disastrously through this failure to complete the existing contracts. In comparison with the amounts spent in Europe by America, the cost of entirely carrying out this enormously important work would have been infinitesimal; a thousandth part of our war expense would have permanently changed the face of China.
Indeed, completion of such an enterprise would far transcend mere business. What the Chinese needed was the organization of their national life. In every particular this depended upon communications—trunk lines north and south, east and west—which would have largely overcome obstacles to Chinese progress. The nation's mind, instead of being focussed on building up, unifying, and organizing the different parts of the country, remained localized and scattered. A thousand times the energy needed to achieve this unique work was spent by us in Europe. That is part of the cost of war.
Mr. Charles Denby, interested in automobile manufacture, called one morning and asked that I take a motor ride up the Tartar City Wall—a thing which had never before been attempted. I yielded to the idea, and without further inquiry joined him, together with the commandant of the guard, Colonel W.C. Neville. Leaving the rear gate of the Legation and approaching the broad ramp leading up to the wall, I was surprised to see gathered there all the American marines, as well as many other people, including motion-picture men. I had not counted on this publicity; it was, however, too late to have any regrets, so we were whisked up the steep incline and took a ride on the top of the great wall. This first automobile ascension of the monumental structureexcited a good deal of attention. A British paper tried to raise a laugh by ironically criticizing the British minister for not supporting British industry by taking air flights, or doing other things which might serve to attract attention to national products. I did not mind what was said, as I had enjoyed the excitement of the ride.
Mr. Carey's party had by this time finished its survey. Laborious negotiations had gone on for an acceptable contract to improve the ancient Grand Canal. Mr. Carey also sought a contract for the building of railways. These matters were entrusted to Mr. Roy S. Anderson, who carried on the detailed negotiations. I had given Mr. Carey an introduction to the various officials concerned, and had from time to time supported his efforts, but did not take part in the details. The business was carried on with Mr. Tsao Ju-lin, the Minister of Communications, while the canal matter lay with Mr. Chen Pan-ping, Minister of Agriculture and Commerce, a younger man, educated in Japan and a member of the Christian Church. Mr. Chow Tsu-chi, the Minister of Finance, and Mr. Liang Shih-yi, wielded a directing influence in the negotiations. I was careful to abstain from anything which could possibly savour of pressure, or a desire to take advantage of the difficult financial necessities of the Government. The contracts were made not on the basis of any temporary or local interest, but to furnish a foundation for long-continued constructive work.
The Chinese Government gave to the American concern the right to build fifteen hundred miles of railway, to be selected from five alignments mentioned in the contract. Mr. Carey started for America on May 18th, to secure ratification of the agreements. With him he took the most favourable concessions which the Chinese Government had ever granted to foreigners. All the most advantageous provisions of former contracts had been embodied; the American contractors were to get a commission of 10 percent. on the cost of construction and equipment, and were to share, also, in the profits of operation. A broad policy of development was adopted, embracing the encouragement of industries along the railways to be built.
The Chinese Government, accustomed to financial support from nations which had valuable concessions, hoped that the Americans would now offer such assistance. The concessions were in no sense made dependent upon loans, but collateral loan negotiations were proceeding, and Mr. Carey took with him proposals concerning loans and securities offered. His associates made every effort to secure a loan to China, but as they now turned over their holdings to the American International Corporation, and as the latter was negotiating to take over the American group agreements with Great Britain, Russia, France, and Japan, the matter became hopelessly tangled up with international affairs and no action resulted. The Americans understood that Japan would coöperate in a joint loan but would oppose any separate action by the United States. American finance was still too provincial to act independently in such a matter. Also it would approach each piece of business as a separate unit, not ready to exert itself in behalf of a loan in order to create a more favourable situation for other transactions. European and Japanese combinations in China took a different view; they were organized to represent a broad national interest in Chinese business. While the attitude of individual American corporations corresponded to the individualism of our business, yet the national commercial interest of America was bound to suffer because an organization did not exist which was broadly representative, which would look upon all parts of Chinese commerce and finance in their interrelation, and gather from every individual exertion favourable cumulative effects in other fields of enterprise.
In yet another respect American practice was unsuited to the conditions of business in China. After negotiating in apainstaking manner for months, the corporation's representatives had finally signed a formal agreement that was more advantageous than any ever granted before. The results of this successful negotiation were set before the home office, which took the position that its hands were still completely free. The provisions of the contract were minutely reëxamined; on several points it was concluded that still more favourable arrangements might be made. The representatives were instructed to reopen the negotiations, making the consent of the home corporation dependent on the acceptance of these additional terms.
Such a method could not be used in China more than once. The Chinese expect that when an agreement is arrived at with business representatives in Peking, it will be adhered to, unless very radical changes of conditions occur. They have been dealing on this basis with the agents of European corporations, whose experience is considered by their home offices as entitling them to handle the details of the negotiations without reporting minutely to home officials far less informed than they. To disavow the activity of a local representative in China, except under absolute necessity, is to discredit the whole negotiation. The representative who should wield great influence is suddenly reduced to the dimensions of a clerk with whom the Chinese will not take up anything of importance thereafter.
That the Americans would not make a loan disappointed the Chinese officials. They were used to looking for financial support to powerful groups, who desired or had obtained concessions. When, in addition, proposals came for many changes in the signed contracts, the displeasure of the Chinese knew no limits. The storm broke just before the funeral of Yuan Shih-kai. I was appealed to for aid in predisposing the Chinese officials to look upon the new proposals with more favour. The Minister of Communications as well as Mr. Chu Chi-chien, the Minister of the Interior,whom I interviewed, were dejected because the loan had been so abruptly refused. They had counted on America to take part in Chinese finance, in order that the Chinese Government might not be entirely at the mercy of the Five-Power Consortium, or rather of Japan, which was now the only active member of that group. I tried to explain the action of the Americans on the basis of sound business practice. I pointed out that in the United States, capital, industry, and commerce are not mobilized for foreign enterprise as is the case with the big foreign banking institutions of Europe. I tried to encourage them to set American firms to doing constructive work in China, and assured them that out of such relationships there would naturally grow a readiness to afford financial support.
They did not dispute my point, but, in the words of Cleveland, they felt themselves confronted by a condition, not a theory.
CHAPTER XIX
GUARDING THE "OPEN DOOR"
Negotiations had been proceeding all through the autumn of 1916, between the Corporation and the Chinese Government, concerning the modifications which the former desired to introduce into the Grand Canal contract signed in May. The negotiations on the part of the Chinese were in the hands of the Minister of Agriculture, and of Mr. Pan Fu, a young Shantung capitalist and official of progressive ideas. As the Minister of Agriculture was not well disposed, it was found difficult to get him to agree to the additional advantages which the Corporation desired to secure before finally ratifying the contract. Shortly before Christmas, however, a basis of agreement had been reached. Just at this time there came from America the astonishing news that the American corporation had invited Japanese capitalists to coöperate in this contract, on condition that such coöperation would be acceptable to the Chinese Government.
The representatives of the American corporation in Peking had no thought nor inkling whatsoever of this change in policy. The step had been taken without warning and without consulting either the American Government or the representatives of the company in China. It may be imagined in what position it left the latter, to whom the Chinese had entrusted these important rights solely because of the confidence they had in Americans, both as to their ability to carry through an enterprise of this kind, and as to their complete freedom from all political afterthought. Unmindful of the fiduciary relationship which their representatives had established in China, the American corporation, without first sounding the Chinese and without giving any intimation to the American Government—through whose approval and support they had been able to gain these rights—turned around and made an agreement to bring the subjects of another nation into the contract. It is to be doubted if the nationals of any other country would have acted in this manner.
If the action had been taken out of deference to rights which the Japanese might claim in the future as a part of a sphere of influence to be asserted in Shantung, then indeed it was one of superlative international courtesy. New York bankers, however, were at this time still notoriously the most timid beings known to experience, when it came to matters of foreign investment. To make up for this they did, when they once got started, throw away American money in amazing quantities on reckless foreign enterprises in Europe and South America.
What made this action so inexcusable was not that Japanese coöperation had been invited or accepted, but that the one enterprise selected for such coöperation was the one in which America, through the National Red Cross, had long been interested and which had been committed to Americans as a special mark of confidence. One might have thought that goodwill to the Japanese might have been amply demonstrated had our people declared their complete readiness to coöperate on any one of the numerous unfinished enterprises which the Japanese controlled in Manchuria and elsewhere.
It was no easy task for the representatives of the American corporation to tell the Chinese what had been done in New York. The proviso that the arrangement was conditional upon its being acceptable to the Chinese was of course pathetically ineffectual, because after the arrangement made in New York the Chinese could certainly not refuseto accept any outside partners without giving very serious offence to them. I told the Chinese that we wished them to act with perfect freedom and consult their own best interests in dealing with the American corporation. But the Premier met all my explanations with: "What can we do? The corporation has tied our hands."
The Chinese had shown special favour and bestowed their contracts upon the American nation; by their own act Americans had changed this disposal in such a way as to let in a third party. Personally, I had not the least objection to the Japanese or any other nation; although it seemed that in China coöperation with the Chinese would be the normal method. Yet my experience with the Hukuang railways had made me very doubtful of the practical advantages of international coöperation in industry. It is a cumbersome, expensive way of doing business, full of delay and circumlocution. I felt that the different nations should mutually facilitate each other's enterprises and coöperate in constructive planning from which all might derive advantage; but I felt strongly that individual enterprises should be managed by a particular group or corporation without complicated international machinery.
The railway concessions made to the Siems-Carey Company, which were to be financed by the American International Corporation, were also making trouble. Protests were made by the Russian Legation with regard to the alignment from Tatungfu toward Lanchow; these rested upon an old assurance given by the Chinese to Russia that any line northward or eastward from Peking and Kalgan should first invite Russian capital. But the protests had a weak leg to stand on, for the proposed line led southwestward from Kalgan, away from Russia's dominions. They had the less force in that the European Powers could not at this time furnish money for the construction of the much-needed railways which had been committed to their care; the moreneed, therefore, that America, which had means, should build other necessary railways to provide China with inter-provincial transit.
But that was the method of diplomacy—to hunt about for some ground of protest to the Chinese Government, in order to obtain from it a few counterbalancing advantages. The American policy of equal opportunity had the verbal agreement of the other important powers, but we had to be vigilant if Americans were to be protected in their right to do business in various parts of China on the basis of this policy. Everywhere we met attempts to solidify the inchoate desires and lusts to secure exclusive rights, until the "spheres of influence" should be firmly outlined.
I always took the position with the Russian minister that the American concession in this case did not conflict with any promise given to Russia. He spoke to me about the wish of Russia to use Mongolia as a protective barrier. If Mongolia were to be developed through railways and colonization, he felt that friction between Russia and China might come about through this mutual approach of large populations. To keep so vast a territory barren and unproductive just to serve as frontier marches seemed to me unjustifiable. But I did not dispute the policy, rather insisting that a railway that connected one of the eighteen provinces of China with another could have but remote bearing on the fears expressed by my Russian colleague. I told him the survey would go on, but whether the road would be built would depend upon the judgment of the engineers as to whether it would be commercially profitable. The conversations were very leisurely. He did not say so, but I could see that the minister fully expected the Americans to go ahead, while he would use his protests as a means of getting some "compensation" out of the Chinese.
I was therefore not a little surprised when on one of my visits to him the Russian minister met me with a quizzicalsmile, and handed me a telegram which he had just received from Washington. The dispatch was from the Russian ambassador, and read in substance as follows:
A representative of the American International Corporation has just called on me. He stated that the corporation regretted beyond measure that the impression had been given that it might contemplate undertakings in China which would be unwelcome to the Russian Government, and to which the latter would object. He stated that it was far from the intention of the corporation to do anything in China that would thus be objectionable to the Russian Government.
A representative of the American International Corporation has just called on me. He stated that the corporation regretted beyond measure that the impression had been given that it might contemplate undertakings in China which would be unwelcome to the Russian Government, and to which the latter would object. He stated that it was far from the intention of the corporation to do anything in China that would thus be objectionable to the Russian Government.
Never was the ground cut from under any one exerting himself to safeguard the interests of others as was done in this case. There was nothing to do but to say: "They are very courteous, and wish to save your susceptibility. They would probably not ask for any branches in the direction of Urga, and confine themselves just to building the main line to Kansu." The Russian minister did not take an undue advantage of me.
The next protest came from the French Legation. They had dug up a note sent them on September 26, 1914, by the Minister for Foreign Affairs of that time. This note, conveying an entirely unnecessary gift by that good-natured minister, had been kept secret; it acknowledged the handsome manner assumed by the French minister during the negotiations about a small frontier incident. Just to show absence of ill feeling, the Foreign Minister assured the French minister that in case in future any mining or railway enterprises were to be undertaken in the Province of Kwangsi, French capital would be consulted first. It was a grim joke that an official should thus light-heartedly and withoutquid pro quosign away important rights in contravention to all the announced policies of his and other governments, including that to which the grant was made. The French protest related to the southern part of the line from Chuchow in Honan, to Chinchow, on the coast of Kwangsi.
I took the stand that the note which had turned up was contrary to the expressed policy of the various governments concerned, and could have no bearing on the relations of American citizens with China; moreover, it had been secret, and neither the public nor any other government knew about it. As the French minister whom the Chinese had asked the French Government to withdraw because of his domineering attitude was not at this time complacent in this or any other matter, I suggested that the Department of State take up this question directly with the French Minister for Foreign Affairs. I expressed the hope that the French, our military and diplomatic associates, would wish particularly to adhere "to the letter and the spirit of the declarations of equal commercial opportunities."
The Continental Commercial Bank Loan had been announced in November, 1916. I was happy that this result had been achieved. An advance of only $5,000,000 was made, but even that small sum was an important aid to the Chinese Government. The fact that a big Western financial institution had taken up relations with China was promising. What foreign banking there was in New York was tangled up with European interests, followed the lead of London, and had not manifested much readiness to exert itself for the development of American interests abroad.
The French protested this loan because it carried the security of the tobacco and wine tax which had been assigned to some previous French loans. I saw Doctor Chen, and Count Martel called on me. I took the position that as the French loan—which was small in amount and would require only a very minor portion of the proceeds of the tax—remained entitled to be the first lien, the French interests were in no way prejudiced. I imagine, what they really objected to was the eventual appointment of an American auditor or co-inspector for this revenue. As this, however, would go to strengthen the security for their loan, I do not see thatthey had any reason for complaint. The representative of the French bank which was interested saw me and made a tentative suggestion that if adviserships were established the French might take the wine tax, and the Americans the tobacco tax. I felt, however, that the hands of the Chinese were perfectly free when the loan was made; there could be no objection, except on the supposition that wherever the Chinese do business, no matter how small, with respect to any subject matter, they impliedly give a lien on all future dealings. To the general suggestion of American-French coöperation in matters for which both parties could find capital, I was by no means averse.