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 and young 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 the _Far 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 be expected 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 Li Yuan-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 Peking _Gazette_, 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 countries which 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 the United 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 association with 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 for a 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.

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 has been 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 too strongly 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, bringing his 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.