CHAPTER XXIX

JAPAN SHOWS HER TEETH

Mr. Obata had succeeded Baron Hayashi as Japanese minister in December. He was a dour, silent man who had been much in China, as consular officer and in the Legation. He had sat with Mr. Hioki in the conferences in which the twenty-one demands were pressed on China. He was known to be a very direct representative, in the diplomatic service, of the militarist masters of Japan. His appointment was to the Chinese ominous of a continuance of aggressive tactics. A wail of indignation went up from the Chinese press, but Mr. Obata remained. In my personal relations with this secretive man I thought I saw gradually emerging a broader and more humane outlook.

The new Japanese minister called on the 2nd of February, 1919, at the Foreign Office and expressed resentment at the attitude of the Chinese delegation at Paris. The Chinese representatives had said they were willing to publish all the secret agreements which the diplomacy of Nippon had been weaving around China. Japan objected. The sacred treaties between China and Japan were not to be divulged without the consent of both parties. If China was so anxious to purge herself of secret diplomacy, let her publish first the agreement of September 24, 1918, which gave the special privileges of Germany in Shantung to Japan. The displeasure of the Japanese in Paris was reënforced by Mr. Obata in Peking by what the Chinese took to be a veiled threat. "Great Britain," said he, "is preoccupied with internal disorders. She cannot assist China. But Japan is fully able to assist, as she has a navy of 500,000 tons, and an army of more than a million men ready for action."

The Shantung agreement had been the consummation of the Japanese-controlled Minister of Communications. The Chinese Foreign Office was not consulted when the Chinese minister at Tokyo signed it, and it had not been ratified by the Chinese Government. The Chinese people viewed it merely as a draft, and demanded its cancellation with the return to Japan of the moneys received under it by the politicians.

Mr. Obata's threat, which the Chinese took to be an attempt to intimidate the Chinese delegation at Paris, evoked a deluge of telegraphic messages urging the President and the Government by all possible means to back their delegates. These expressions came from men of all parties. Chen Lu, Acting Foreign Minister, tried in vain to minimize the effect of the interview. Called before the Chamber of Representatives in secret session, he said that the newspaper reports had been "somewhat exaggerated," and added: "In this time when the right and justice of the Allied Powers have definitely destroyed militarism and despotism, we Chinese, although as yet a weak country, may consider every menace of foreign aggression as a thing of the past, and accept it with a smile."

The Government at first cabled the Paris delegation not to make the secret treaties public; they were not held to be valid by the Chinese Government, and publication might lend them force. Later, the Government cabled, leaving it entirely to the discretion of the delegates. The diplomatic commission of the Chin Pu Tang recommended this. Meanwhile, Mr. Liang Chi-chao had gone to France. He meant to go by way of the United States, where I had prepared for him an itinerary and letters of introduction. Then his intimate associate, Tang Hua-lung, was assassinated in Vancouver. Liang, fearful of a similar fate, went straight to France, evading the Kuo Min Tang sympathizers in America. Ex-Premier Hsiung Hsi-ling told me that Liang was to inform the Chinese delegates unofficially about the state of things in China.

This was so bad that the American recommendation that the powers keep their money away from either party until China was reunited looked more and more desirable. An influential and responsible Chinese, who talked with me about the clique that ran the War Participation Bureau, made this statement: "The danger to China is in the efforts of Tuan's militarists. Japan is giving them money to build up an army. With this they will try to overawe the President and force him to fall in with their aims. The negotiations for peace with the south will cease; the war with the south will go on."

One of the most burning questions both to private individuals and the press was how to oblige Japan and her officials to cease their support of the northern militarists by the sending of money and arms. Certainly a fire was built under them. The Japanese minister called on me on the 9th of January to say that his government would now join in a declaration on financial assistance to China. He had to make reservations about the loan of 20,000,000 yen, pledged in connection with the secret military agreement, also as to the so-called "industrial" loans. The secret loan arrangement had been made with three Japanese banks: the Bank of Chosen, the Industrial Bank of Japan, and the Bank of Formosa, by the War Participation Bureau. With this, the minister said, he could not interfere. Also, his government was in principle favouring a restriction of the sale of arms, as America recommended; but it would be best for the powers to say nothing about it, as their joint statement would be taken as an attempt to restrain Japan, which was the only country able to furnish arms to China. Besides, the War Participation Bureau had a troublesome private contract for arms with the Tayeh Company, which the Government felt it couldn't interfere with. So there you are, as Henry James would put it.

I told the Japanese minister that we were not proposing any platonic arrangement as Americans were both able and willing to furnish arms to the Chinese under legitimate contracts, if the American Government would permit it. Moreover, as to the transaction of those three Japanese banks--since the Government of Japan had an interest both in them and in the munitions company mentioned, their alliance with the War Participation Bureau would be dissociated with difficulty in the public mind from the Japanese Government.

The War Participation Bureau clique was actually getting ready to equip an army against the south while the North-and-South Peace Conference was sitting at Shanghai. Tang Shao-yi, chief peace representative of the south, formally remonstrated to the British minister, as dean of the diplomatic corps, against such doings of this "Bureau" and its Japanese support.

Now, the Bureau had been established as its name implied, to facilitate participation of China in the Great War. Japan's financial support of it was ostensibly given also in behalf of the other Allies. If it were to be prostituted to the fomenting of civil war the others as well could not escape responsibility. A meeting was held on the 12th of February by the Allied and Associated ministers. Several strongly urged that outside money continually given for recruiting of troops was opposed to the aim of restoring settled conditions in China and to the policy of the joint declaration of December. The Japanese minister was silent. He said he must await instructions.

He informed me on February 21st that Japan had called a halt on the shipping of ammunition and equipment to the War Participation Bureau, but the payment of the balance of the loan could not be stopped. Just then, as it happened, an American firm would soon be ready to begin delivery of a certain amount of equipment in China, contracted for in good faith during the previous August. America had proposed a joint declaration against the furnishing of arms, which Japan had blocked. As the declaration had not been made, I could not then stop the American delivery though I did so later. But America would still be only too glad to join in the declaration as proposed.

As the Japanese were still paying the loan funds into the War Participation Bureau, another diplomatic "indignation meeting" was held about it on March 6th. The Japanese minister said his banks could not help paying over those funds, but he had suggested to the Chinese Government that it might be well, in the circumstances, to refrain from drawing the money; Japan could not object to this. Forthwith one of the ministers spoke up: "Then let us all make this recommendation which Japan has made."

At this the Japanese minister was taken aback, almost shocked. He had always argued that the War Participation Bureau was a Chinese internal affair, not one in which the powers that had helped form it should presume to dip. But the suggestion was quickly adopted. As a result, the representatives of Great Britain, France, Italy, and the United States, all solemnly called on the Minister for Foreign Affairs, expressing their opinion that to draw the war participation funds was not advisable, as it constituted an obstacle to internal peace.

But Japan's advice had been merely for the record, not at all to be acted upon. Soon there came over to Sir John Jordan an informal memorandum from the Foreign Office, taking the Japanese line of thought that the War Participation Bureau was China's internal affair. It might be construed as an intimation that we were meddling. Indeed, two Chinese of high position told me that the President and the Premier had held up the memorandum for several days for fear that it might give offense, until the Minister of War absolutely insisted upon its being sent.

Through these two men I sent a quiet intimation to the President that withdrawal of the memorandum would prevent unpleasant feelings among men who were sincerely friendly to him and to China. The memorandum was pulled back without delay; thereupon all the Chinese officials, except the few directly connected with the War Participation Bureau, rejoiced.

The five representatives who signed the original declaration of December met again on the 11th of March, because the French minister had instructions favouring action upon the Bureau. The Japanese minister advanced his arguments about its being China's business, not ours. But the others took the view that as it was an Allied war institution and Japan had dealt directly with it, it was quasi-external in character. "Is it not quite clear," protested the Japanese minister, "that the loan was purely a commercial affair, made by certain banks, and not controlled by the Japanese Government?" How, then, it was asked in reply, does it happen that in connection with this loan, officers of the Japanese army had been assigned to the War Participation Bureau as advisers and instructors; was it customary to make such extraordinary arrangements in connection with a purely commercial transaction?

"I am not sufficiently informed," Mr. Obata responded evasively. "I shall have to refer to the reports of these transactions."

The position of Japan in this matter was so patently equivocal that it was amusing. We decided that we should make it plain that as this bureau was created to further our common purposes, we could not acquiesce in any political action or in the use of any money which would tend to prolong internal strife.

The Japanese minister on the 1st of March had notified the Chinese Government that no further deliveries of arms would be made to the War Participation Bureau pending the termination of the North-and-South Peace Conference at Shanghai. We proposed to follow this up with joint action. Certain representatives were uninstructed, though they favoured frowning on the arms imports. Finally eight powers united "effectively to restrain their subjects and citizens from importing into China arms and munitions of war until the establishment of a government whose authority is recognized throughout the whole country." This included the delivery of arms under contracts already made but not executed. I could then warn the American firm not to execute its contract for the time being, and I did so.

From time to time, since the early spring of 1918, Baron Sakatani, Japanese ex-Minister of Finance, had been in Peking. Mr. Liang Chi-chao, when as Minister of Finance he made his Japanese loans, had held out the possibility of the appointment of a Japanese financial advisor. The Baron was an old acquaintance of mine and I held him in high regard; but, in view of the fact that I could not consider this time a proper one for settling the matter of the financial advisorships, I had to distinguish between my personal feelings for him and the official stand which I might have to take. A Japanese friend wrote me in connection with Baron Sakatani's visit to China: "A section of our capitalists have been given every facility to make money and to lend it to China; with the money squeezed from them, the military bureaucrats have been corrupting party men and sending them to China and elsewhere, to exploit the warring nations while they are busy with the war. The civilian officials and militarists cannot think anything except in terms of German fear or admiration. If such Japanese are employed by the Peking government, it will forever alienate Chinese sympathies from anything we may propose."

Baron Sakatani from the first had nursed the ambition of being made currency adviser to the Chinese Government; by January, 1919, it appeared that his wish was to be fulfilled. The Japanese minister announced that the other nations had agreed to the Baron's appointment. I had not agreed to it. I had heard nothing whatever about it and had consistently and energetically opposed any action of this sort. I considered that it would permanently determine the course to be taken with regard to currency loans, and would preclude the possibility of any consultation with the United States. I requested the Minister of Finance to defer the appointment until I could consult my government. The next development came on the 20th when the Japanese minister handed me a memorandum which referred to the personal goodwill I had expressed to Baron Hayashi and which went on to state that the proposed appointment of Baron Sakatani had been sanctioned by Mr. Lansing in Washington.

I cabled to Washington, receiving therefrom on the 30th instructions saying that the appointment of a currency adviser should be settled only after full consultation by all concerned, and that Mr. Lansing had not committed himself to any other understanding. I sent a note to the Minister of Finance, stating that as one of the parties to the Currency Loan Agreement, the United States wished that action be postponed until further consideration could be given. I was immediately assured that the position taken would be considered as final. As a personal friend I regretted that Baron Sakatani could not be retained, but in so important a matter it was impossible to stand aside while action was rushed through which would be prejudicial to the long-established interests of the powers who were, at the time, preoccupied with after-war problems.