CHAPTER XXVII

AMIDST TROUBLES PEKING REJOICES

The Armistice meant the end of the Great War. Would it also mean the end of sinister intrigue in China?

In the joy of the world victory everybody felt so. But when I returned to Peking early in October, 1918, I found that things had gone from bad to worse. Money had been squandered on war expeditions which had torn the country, not united it. The unofficial Japanese financial agent, Mr. Nishihara, a borer in the rotten trunk of Chinese finance, had been at work all summer. The fact of his loan negotiations was denied to the very last by the Japanese Legation. Suddenly, on October 1st, Japan's Minister of Finance announced that his government had arranged a number of loans to the Chinese. They involved commitments in the sum of 320,000,000 yen, ostensibly to build railways and iron works; of this amount 40,000,000 yen would be immediately advanced.

The earlier loans had all gone to the inept militarists. The advances on these so-called industrial loans were in the same way dissipated in partisanship, division, distraction. The new parliament had been elected. It was to elect a new president. Money was poured into the contest between Feng, the Acting President, and Hsu Shih-chang. General Tuan had his army of small political adherents, who battened on the funds supplied by the chief manipulators. They formed the Anfu Club--from _An_hui, the province of the army clique, and _Fu_kien, the province whence the navy drew most of its admirals.

The inner military ring was operating from the War Participation Bureau, which had preëmpted the control of finance, natural resources, and police. The ministries were powerless. The Government was debauched with the easy money from Japan. With a sardonic grin, the Japanese offered to lend China 200,000,000 paper yen, not redeemable, on which the Chinese Government should base a gold-note issue. On this paper of the Bank of Korea China should repay Japan, with interest annually.

Using the militarists, they tried hard to put it through. But the foreign press, and such Chinese papers as dared, succeeded in laughing it down. Redeemable in Korean or Japanese banknotes, which the Chinese never use in daily trade, the proposed government gold notes could not have been forced into circulation. They would only have worse confounded the already existing monetary confusion.

The police terrorized and bullied the papers that opposed Japan's loan negotiations and printed the facts about them. Nearly a dozen were suppressed. The Anfu gang had cowed the Government and people in north China. Without moral and legal authority, it made the Government impotent in its prime functions, such as levying taxes and protecting lives.

The diplomatic corps had to consider whether the customs and salt revenues should be released to such a government. The best interests not only of China, but of all the friendly nations, including Japan herself, were being blighted. The prostitution of the War Participation Bureau by the gold-lust of the militarists, with Japan as pander, fostered the brawls of faction and disunion. Public opinion was throttled and the corrupt elements found no organized popular opposition.

Tsao Ju-lin, Minister of Finance, advocated the spurious gold-note project, which had been dubbed the "gold-brick scheme." Tsao had represented that the diplomatic corps had approved this scheme. Four ministers jointly informed the Chinese Government that Mr. Tsao's methods tended to destroy confidence between the Government and the legations, and one minister said his legation would thenceforward accept no statement coming from the Minister of Finance until the Foreign Office had vouched for its truth.

The Finance Minister unblushingly tried to suspend the renewal of the currency loan option until the foreign banks should consent to the gold-note scheme. Here I protested, saying that under the Currency Loan Agreement the American Government had a right to be consulted before any such proposals could be considered.

His Excellency Hsu Shih-chang was elected President--a veteran statesman of the old régime. In my first interview with him he complained: "I am trying to deal with the south; but they have nobody to bind them together and represent them. We are demobilizing most of our superfluous troops, but I am worried because the Government lacks financial support."

I talked with him again often. General Li Shun, of Nanking, had been asked to mediate. The southern leaders needed to be "grubstaked" to pay off their troops, then an agreement with them could be reached. The President's solution smacked of buying them off. But this would not end the militarist intriguing. President Hsu issued on October 25th a peace mandate, taking President Wilson's statement about reconstituting international unity as his point of departure. The President had cabled this to Hsu when he was inaugurated. The press was reporting that the British and American ministers were working for internal peace; our mediation would have been popular. It would have pulled the leaders of north and south out of their impasse. President Hsu cabled back to Mr. Wilson: "Though we are separated by a great distance, yet I feel your influence as if we were face to face."

President Hsu had gotten a report from Dr. George E. Morrison, who had returned from investigations in south China. Doctor Morrison made the point that internal strife must be ended if China was to do anything in the Great War and to hold up her rights strongly at the Peace Conference. I will quote this report somewhat at length:

China under the advice of several of her more powerful ministers looks to Japan for guidance, Japan having in an incredibly short space of time, by the energy and patriotism of her united people and the wisdom of her rulers, raised herself to an important position among the nations. But Japan is no longer one of the great world powers. Japan lacks experience of modern war. Her army and navy are much out of date. Her troops have no experience of the marvellous methods of modern war. She has no submarine service, she has no air service. Her government, created after the model of Germany, her kaiserism, her Prussian militarism, are fast becoming obsolete. Compared with the great powers of Great Britain, America, France, and Italy, the strength of Japan is meagre. Japan at the end of the European war is a third-rate power. Her government is the only military autocracy existing in the world to-day, and for that reason Japan will occupy a unique position at any peace conference. Japan is the only one of the Allied nations who has failed to take any adequate part in the great world struggle.

For China, a republic, to seek the guidance of the only existing autocratic military government in the world to-day has at least the appearance of inconsistency. Such action is viewed with suspicion by all those in China who are aspiring to a democratic government--a government by the people for the people.

If intervention is to be prevented, there must be early restoration of democratic government, early reconciliation. As the simplest and quickest way in which this can be effected, I suggest that your Excellency invite the President of the United States to act as mediator, to bring together representatives of the two great parties of state in China that they may hear and weigh each other's view and agree to a compromise. There is no loss of face in doing this.

During my recent visit to the south I gave expression to Chinese views to all the leading men with whom I had the opportunity of discussing the question of peace and reconciliation in China. All without exception expressed their belief and confidence that an invitation to the President of the United States to act as mediator would be a wise act and one that promised the easiest solution of the grave conflict which at present divides into hostile camps this fair land of China.

Japan persisted in her work, the United States remained indifferent.

The people of China got tired of all this. As a matter of fact, China was divided only on the surface. Deep down into the life of the people political controversies had not penetrated. They went on, placid and industrious, regardless of the bickerings of politicians. Chinese revolutions and declarations of independence might be bruited to the world, which might think China had plunged into anarchy. As a people the Chinese are freer from governmental interference than any nation living. If the entire Central Government should suddenly disappear from the face of the earth, it would make little difference in China. Yet the long continuance of political conflicts lets foreign intrigue into the national quarrels, and so reacts dangerously.

The people as a whole wished the nation to be a unit. But the professional militarists had to be paid off. After the President had issued his peace mandate, he asked that I see him. "If decisive action for peace is taken," he asked, "may we depend on the United States to back us in getting funds to pay off these large bodies of troops? If not, will she not lead in a reorganization loan joined by several powers?"

I asked the American Government for the funds desired. If they came conditionally upon the reunion of China, the responsible military governors and civilian leaders north and south would have the means to be rid of the predatory and parasitic bands. Japan then roused herself. She approached the governments of the United States, France, Great Britain, and Italy on October 23rd, asking that they work toward a peace settlement with the leaders both north and south. The American Government approved, adding that China needed money, but that no funds would be afforded her until a reunited government was seated.

Meanwhile, the temper of the Chinese people was sounded in a gratifying way. John Mott asked the Y.M.C.A. in China to raise $100,000 for the War Works Drive. I sat at dinner one evening with Liang Shih-yi and Chow Tsu-chi, and said: "A drive is going on in the United States to aid all the war works undertaken for the benefit of the soldiers at the front. Do you suppose that some of our friends in China would wish to contribute?" They both replied: "Yes, we are sure they would."

Two days elapsed. Chow Tsu-chi called, told me they had formed a National War Works Committee, and that local committees were being formed in every provincial capital. They raised, not $100,000, but more than $1,000,000!

It was the more remarkable because this way of contributing to a public purpose had never been tried in China. Only the _Shun Tien Shih Pao_ of Peking, Japanese-controlled, threw cold water on the movement, saying that to be sending money to Europe while so many provinces in China themselves needed aid was peculiar.

The representatives of the Associated Powers met on October 18th. They felt that participation in the war had not united China; a clique had perverted it to factional uses. Each representative, it was agreed, should present instances in which the Central Government or local officials had obstructed action or been remiss. At the next meeting, on the 28th, I had prepared a memorandum of instances; this was made the basis of a statement. A conference was to be held with the President of China, to be quite friendly, but to make manifest the grave shortcomings due to political vices. Thus, it was thought, the responsible and conscientious elements in the Government would be fortified against the clique that had invaded it. The Foreign Minister, however, asked that the conference be deferred, in order that the Government might strive to bring its action more completely into accord with its real desire. There was no threat in our suggestion. But publicists often overlooked its true object, and treated it as if it had been a condemnation of China rather than of the controlling clique in the Government.

Joy and cheerfulness greeted the news of the Armistice. The American Legation Band was the first to celebrate, with a detachment of marines it paraded the legation compounds; only the Japanese Legation sentinel failed to salute it; he had failed to gather its purport. At Sir John Jordan's personal invitation I joined the British Legation's impromptu festivities that night, with some members of my staff. Responding to Sir John's remarks of welcome, I spoke of the trinity of democratic peoples, the British, French, and Americans, as destined to lead the world to a fuller understanding of free institutions and popular rights.

In the continuous round of festivities and celebrations the foreign and Chinese communities joined whole-heartedly, with dinners, receptions, special meetings of societies, and finally a great national celebration on the 28th of November. We gave a reception on the 20th to the ministers of the Associated Powers. As each minister arrived, the national air of his country was played by the Marine Band. When the Russian minister came in, the band, without special instructions, played the old Russian Imperial hymn. Prince Koudacheff was moved, for this anthem was now outlawed in his country; he came to me in tears. Next day he showed me a song with music which he had suggested for adoption by the Siberian Government as the Russian national hymn. But at the solemn service held on the Sunday following, when the national airs of the different countries were played, when the turn came for the Russian hymn a pause was noted. Those conducting the service had ruled out the old Imperial hymn. As there was apparently no music available as a substitute, poor Russia had to go unsaluted.

From early in the morning of the national celebration, Chinese troops marched toward the Imperial City, where they lined the spacious interior courts. The legation guards followed. Multitudes of Europeans and Chinese flocked to the palace, where the diplomats were gathered, all but myself resplendent in gorgeous uniforms. The neutral ministers, too, were in attendance. The European adviser had found a precedent among peace celebrations in Europe, such as that after the Danish War and the Franco-Prussian War, in accordance with which the neutral ministers might attend, though peace was not fully concluded. Also, it was argued that the Chinese were celebrating the cessation of hostilities, and the participation of friendly representatives might be invited.

Whispered controversy was heard among the ministers. The representative of France, seeing senior neutral representatives ahead of him, said this occasion was different, and demanded that the rank of precedence be changed. Time was too short for so thorny a problem. We agreed to say nothing at all, but to walk in a group forming itself spontaneously.

We gathered in the pavilion of the Ta Ho-men, the gate which leads into the court immediately before the main Coronation Hall of the Imperial City. Here, in the very inner sanctuary of the thousand-year-old imperialism of China, the victory of freedom was celebrated. The square was massed with troops, Chinese and foreign. On the ascending terraces stood thousands of guests, the military and officials in uniform; over the balustrades waved forests of flags of the Associated Nations, as well as long floating banners with Chinese inscriptions in gold.

After the President had ascended the steps to the music of bands of the nations, bowed to all the flags, and made his address, aeroplanes appeared, dropping innumerable Chinese flags and messages of felicitation printed in gold on red; then they continued to circle above the Imperial City. While the military were marching to the gate, rockets were sent skyward; exploding, they released paper figures of animals, as well as soldiers and weapons of war, which floated a long time in the air. When the President left the Tung Hua Palace, where he had received thousands of guests, the aeroplanes preceded him on his ride to his own residence.

We celebrated Thanksgiving that afternoon in American fashion with a religious service, the American colony and many British and other Allied residents attending, as well as the ministers of the Associated Powers with their staffs. Premier Chien Neng-hsun dined the diplomatic corps and welcomed President Wilson's proposal for a league of nations. President Hsu invited us on November 30th, and then the French minister, who still was troubled with the question of the non-belligerents, objected to the neutral ministers being there at all. If they went, he said, he would not go. The British minister and I devised, as we thought, a way out. Would the neutral ministers view the Allied ministers as guests of honour on this occasion? The secretary to the Foreign Minister was chosen to ask them. Unfortunately, the neutrals took it as a demand rather than an inquiry. Then the fat was in the fire--the neutral ministers would not attend the dinner. This was the one discordant note in our celebrations.

In order to enable the Central Government to get along at all, the diplomatic corps agreed to the release of surplus salt revenues to the extent of $5,300,000. President Hsu on the 16th of November ordered immediate cessation of hostilities in the Chinese interior. The northern leaders were still war-like, but accepted his decision. The British, French, American, Japanese, and Italian representatives and myself met on the 22nd to uphold President Hsu's attitude. We took up the Japanese proposals, deciding that identical representations be made at Peking and Canton. My colleagues asked me to draft an _aide mémoire_ which was to accompany the oral representations. Japan objected to including in it the American suggestion that no financial advances would be made now but that a reunited China would get support from the powers. The Japanese banks had bound themselves to make further payments to China, it was said. The _aide mémoire_ deplored disunion, disavowed wishing to intervene, and hoped that, "while refraining from taking any steps which might obstruct peace, both parties would seek without delay, by frank confidence, the means of obtaining reconciliation." In the clause about obstructing peace I had in mind such acts as the election of a northern militarist as Vice-President. This, though in itself a peaceful act, would have raised an insurmountable obstacle to peace.

Five powers were represented in an audience before the President on December 2nd, the British minister speaking. The northern military leaders had held a conference at Tientsin. If, as reported, they wished to demand that Tuan be reinstalled as Premier, and that Tsao Kun, Military Governor of Chihli, be elected Vice-President, it would have embittered the south. The public therefore welcomed the representations of the powers. The American reference to loans was omitted; nevertheless, the situation produced made it no longer possible for any one country to lend money to either faction without putting itself in an equivocal position.

The Japanese felt moved on the 3rd of December to publish a statement about Chinese finance. Japan could not discourage financial and economic enterprises of its nationals in China, the statement read, "so long as these enterprises are the natural and legitimate outgrowth of special relations between the two neighbouring and friendly nations. At the same time they fully realize that under the existing conditions of domestic strife in China loans are liable to create misunderstandings and to interfere with peace in China. Accordingly, the Japanese Government has decided to withhold such financial assistance to China as is likely in their opinion to add to the complications of her internal situation."

This declaration left great latitude in the making of loans, yet it did, in fact, acknowledge the appropriateness of the American position. I asked Baron Hayashi about it. What exceptions would be made? The Baron was not very definite but said _bona fide_ industrial loans were meant. "Most decidedly," he added in reply to my continued questioning, "I favour the strictest scrutiny of each loan, and mutual information among the governments about such transactions." He gave me plainly to understand that he did not approve, and had opposed, certain deals attempted by his countrymen in the semi-official group. I gathered his thorough disapproval of direct interference by the military in international affairs; but the military were in power in Japan, and its diplomats were helpless.

In accordance with its main suggestion, the American Government followed with a memorandum about financing China, sent to Great Britain, France, and Japan. It had already proposed a new consortium, including virtually all parties interested in each national group. The Currency Reform Loan should come first, with the shares of the British and French groups carried by the Americans and Japanese so long as the former could not furnish funds. Industrial as well as administrative loans should be included, and thus removed from the sphere of destructive competition.

The danger that industrial loans might be converted to political ends was patent. Yet in my recommendations I felt it difficult to avoid evils of monopoly, unless independent enterprises involving loans should be admitted.

The British and French banking representatives plainly wished to have America lead in the international financial reorganization of China. Japan, as its minister often said, desired the United States to reënter the Consortium--but he meant the old Consortium, in which Japan had the leadership. Japan did not readily take to the idea of the new Consortium. It declared that it favoured the proposal "on principle," but found it necessary to weigh every detail with considerable minuteness. This caused great delay.