CHAPTER XLIV

TRAFFICS AND DISCOVERIES

I. CHINA

THE MISFORTUNES OF KANG YU WEI

On my way up to Pekin, I visited Hong Kong, arriving there on 30th September. The island of Hong Kong, being British territory, is a city of refuge; to which sanctuary, just before my arrival, had fled Kang Yu Wei, the leader of the Reform Party. To the influence of Kang Yu Wei may be ascribed the conversion of the young Emperor, Kuang Hsu, to Reform; and the issue by the Son of Heaven of the series of Decrees, during the Hundred Days of Reform of the preceding summer. The movement culminated in the plot to seize the person of the Empress Dowager, which was frustrated by the _coup d'état_. But before that decisive event occurred, Kang Yu Wei receiving a broad hint from the Emperor that his arrest had been ordered by the Empress Dowager, took the next train from Pekin to Tongku, and embarked on board the coasting steamer _Chungking_ bound for Shanghai.

The Taotai at Shanghai informed Acting-Consul-General Brenan that he had received orders to arrest Kang Yu Wei upon his arrival, and that a reward of 2000 dollars was offered for his capture, and requested Mr. Brenan to search for the fugitive in all British ships arriving at Shanghai. By this time the Chinese detectives and policemen were wildly excited by the prospect of securing 2000 dollars that Mr. Brenan feared they would attempt forcibly to {433} board British ships before they entered the harbour. He therefore determined to intercept the _Chungking_ before the Chinese officials could reach her; but desiring to avoid the open implication of the Consulate in the matter, he accepted the services volunteered by Mr. J. O. P. Bland (joint author of _China under the Empress Dowager_). Mr. Bland, who spoke Chinese, took a steam-launch, met the _Chungking_ some miles out at sea, transhipped Kang Yu Wei, and put him on board the P. and O. steamer _Ballaarat_, then lying outside Woosung. Captain Field, commanding the _Ballaarat_, placed an armed sentry upon Kang Yu Wei's cabin. The people in the _Chungking_, knowing that H.M.S. _Esk_ was at Woosung, told the Chinese officials at Shanghai that Kang Yu Wei had been put on board her. This information diverted attention from the _Ballaarat_ for the moment.

The Chinese officials, however, eventually determined to follow the _Ballaarat_ in a gunboat, when, two days later (29th September), the _Ballaarat_ sailed for Hong Kong. The British authorities, learning also that two more Chinese gunboats were ordered to lie in wait for the P. and O. boat, arranged that she should be escorted to Hong Kong by H.M. cruiser _Bonaventure_, commanded by my old friend and brother-in-arms in the Soudan campaign, Captain R. A. J. Montgomerie. Being pursued by the Chinese gunboat, Montgomerie cleared for action; luckily for them, the Chinese declined to risk an affair with one of the finest fighting officers in Her Majesty's service; and Kang Yu Wei was landed in safety at Hong Kong. Here, Major-General Black placed him under police protection. The procedure followed by Captain Montgomerie in accordance with the orders of Vice-Admiral Sir Edward Seymour, then commander-in-chief on the China station, not only saved the life of the patriot Kang Yu Wei, but prevented the occurrence of the difficulties which would have arisen had the Chinese attempted to board the _Ballaarat_.

With the object of ascertaining the views of the Reform Party concerning the future of China and its relation to the {434} extension of trade and commerce, I invited Kang Yu Wei to visit me. He arrived surrounded by a bodyguard of policemen, for a price was set on his head. Apparently the poor man felt it already loose, for, as he talked, he kept turning it over his shoulder; and little wonder; for it was only three or four days since his brother and five of his colleagues had been executed in Pekin.

"Reforms in the East," said Kang Yu Wei, "invariably demanded martyrs; and, if China did not go to pieces in the meantime, posterity would honour the six dead gentlemen." In reply to my question as to the present position of the Reform Party, he said it was "completely crushed, but not killed," and would ere long revive; a prophecy which has been fulfilled.

Kang Yu Wei affirmed that, contrary to the general opinion abroad, all educated Chinamen believed that Reform alone could prevent the dissolution of an Empire 4000 years old; that by degrees the mass of the people were accepting the new doctrines; that the Reformers relied upon Great Britain to help them to carry their schemes into execution; and that, were they to attain power, they would certainly open China to the trade and commerce of the world, because such a policy would increase the strength and riches of the Empire.

The impression left upon my mind by Kang Yu Wei was that he was loyal, patriotic, and unselfishly devoted to his country, and undoubtedly he was in earnest.

In the course of many conversations held with the compradors (managers) of the great mercantile houses in China, I ascertained that, while several of them were frankly in favour of Reform, all of them agreed that the Reformers had acted in haste, neglecting to prepare their way by means of careful organisation.

THE CHINESE NEW MODEL

Arriving at Pekin on 16th October, 1898, I was kindly invited by Sir Claude Macdonald, British Minister {435} Plenipotentiary, to stay at the Legation. To all Foreign Ministers accredited to Pekin I paid my respects and presented my credentials, which were given to me by the President of the Associated Chambers of Commerce of Great Britain, Sir Stafford Northcote, and which showed that I had been asked to make a report on British trade and commerce, its future development, and what security existed throughout the Chinese Empire for such trade and commerce.

On 20th October, I visited the Tsung-li Yamen; a body created, in 1861, for the purpose of conducting diplomatic negotiations with the representatives of Foreign Powers, and consisting of eight members, of whom three are Manchus and five are Chinese. I was presented to Prince Ching, the President, and was requested to address the members. In my speech, I dwelt upon the anxiety as to the future on the part of British traders on account of the want of security for capital, and the ignoring of treaties by the Chinese; suggested that, unless China organised her military and police forces in order to give security for trade and commerce, foreign countries would adopt the policy embodied in the expression "Spheres of Influence"; affirmed that the British desired no addition to be made to the British Empire, either in the nature of dominion, sphere of influence, or protectorate; explained that what the commercial communities desired was free and uninterrupted opportunities for trade, with equal rights and privileges for all the nations of the world, a policy expressed by the words "Open Door"; and stated that in order to establish such a policy, it was essential that China should maintain her integrity.

Prince Ching asked me how I thought trade and commerce could be better protected that it was at present.

I replied that the only effective method would be thoroughly to reorganise the Chinese army, abolishing the system of maintaining provincial armies; that, as Great Britain had 64 per cent. of the whole foreign trade of China, she was naturally anxious as to its adequate security; and that it was possible that the British Government would allow {436} a British officer to assist the Chinese in putting their army in order; adding that I had no official authority whatever to make the statement, but merely put it forward as a suggestion. I also suggested that should the Chinese Government consider the proposal, it might be well for them to invite other nations which had large trading interests with China, to lend a few officers and non-commissioned officers to work with the British in the reorganisation of the army.

Prince Ching observed that they already had German officers to drill some of their troops; and that Captain Lang, the British naval officer, was in the Chinese service to help them to organise their Fleet. He did not mention, however, what I afterwards discovered, that Captain Lang had found the admiral sitting on the quarter-deck playing fan-tan with his own sentry. Captain Lang subsequently resigned his appointment.

When Prince Ching and some members of the Tsung-li Yamen returned my visit, Prince Ching informed me that the Emperor and the Empress Dowager approved of my suggestions; and that his Excellency Chung Chi Tung, Viceroy of Hunan and Hupeh, had been ordered to have 2000 of his troops ready to be placed under a British officer for drill and organisation, as an experiment, which might possibly lead to the reorganisation of the army as a whole. I replied that as I was in no way authorised to take any responsibility with regard to this matter, any action taken on the part of the Tsung-ii Yamen must go through the British Minister to the British Government. Prince Ching said that it was the intention of the Tsung-li Yamen formally to inform Sir Claude Macdonald of the wishes of the Chinese Government.

My interpreter on these occasions was Mr. Fulford of the British Legation, and all that passed between myself and the high Chinese officials in Pekin was made known by Mr. Fulford to the British Minister.

The question of providing adequate security for British subjects and for British trade and commerce, was thus {437} frankly raised at the beginning. Indeed, all hinged upon its solution. The safety of life and property always depends ultimately upon disciplined force. The force at the disposal of the Chinese Government was scattered, ill-organised and largely inefficient. But, with the men, money and resources actually available, it would have been perfectly feasible to have formed an army of a million men. Such was my view at the time, and I have seen no reason to change it since.

At the request of the Tsung-li Yamen, I drew up the entire scheme complete in every detail for the organisation of the Chinese army; and on several occasions it was discussed with me by the Chinese Ministers at great length.

Briefly described, my scheme was based upon the principle upon which the Imperial Maritime Customs had been formed. The Imperial Maritime Customs was charged with the duty of collecting Custom House dues, which were hypothecated to secure the external indebtedness of China. All nations were represented upon it, and, because Great Britain possessed by far the larger share of Chinese trade, a British officer was placed at its head. The business was impartially managed under the Chinese Government for the common welfare of China and of other nations; and in the result the arrangement worked admirably.

The proposal was, then, to organise the army upon the same basis; appointing officers of those nations who owned interests in China; and, as Great Britain possessed the largest interests, placing a British officer in command under the Chinese Government. Under these conditions, the army would be enabled to secure China both against foreign aggression and internal disturbance. In a word, it would ensure stable government. Under existing conditions, stable government was impossible; for the methods of the Empress Dowager consisted in playing off one party against another, and one viceroy against another. Tsu Hsi succeeded in maintaining her personal ascendancy; but at the cost of so weakening the State, that it was liable to fall a prey to foreign ambition and foreign cupidity.

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The Chinese high officials argued the whole subject with great acumen. They objected that the commander-in-chief might embark upon a career of personal aggrandisement. I replied that as he would be under the Chinese Government, and that as he would be further restricted by his dependence upon an international body of officers, there could be no such danger. And I asked the Chinese whether they had any reason to be dissatisfied with Sir Robert Hart's administration of the Customs. They answered at once that his services were invaluable to China, and said that he worked so hard in Chinese interests that "he might have been a Chinaman."

I then pointed out that a British officer at the head of the army would occupy the same position with regard to the army as Sir Robert Hart occupied with regard to the Customs; offered to select for them the best general I could find for the executive command; and informed them that I was myself prepared to undertake the administrative command.

The objection that the creation of such an army might offend foreign susceptibilities, was also met by the argument that foreign officers would command it.

In reply to a courteous question, I stated that my object in proposing the scheme was to benefit China; and that the reason why I desired to benefit China was that an improvement in Chinese administration must necessarily profit British interests.

I also discussed the subject with his Excellency Yung Lu, he who had executed the _coup d'état_ which resulted in the defeat of the Reformers and the imprisonment of the Emperor Kuang Hsu. Yung Lu, who commanded one of the foreign-drilled armies, stated that the reorganisation of the Chinese army under British and foreign officers would be carried into execution; and asked me whether, supposing that China put the whole of her armies under British officers, Great Britain would assist her in any quarrel that might arise between her and any other Power.

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The direct question was highly significant.

My reply, of course, was that I was unable to discuss political questions; but that Great Britain had no desire to involve herself in quarrels which might arise among other countries.

Yung Lu courteously invited me to visit the military forces then quartered round Pekin; a privilege of which I afterwards availed myself.

Having formulated my scheme for the reorganisation of the Chinese army, founded upon a general knowledge of the requirements of the situation, I proceeded to fulfil in detail that part of my instructions received from the President of the Associated Chambers of Commerce directing me to report "whether the organisation of the Chinese civil and military administration is sufficiently complete to ensure adequate protection to commercial ventures." Accordingly, I visited all the forts and arsenals forming the coast and river defences of the Chinese Empire, and utilised the opportunities, most courteously extended to me by the various viceroys, of inspecting the Imperial military forces.

For the sake of simplicity, the results of my investigations into military and naval conditions are here grouped together; although these investigations were necessarily conducted side by side with my inquiries into commercial affairs, the two elements being often present in the same locality.

China's military forces were then sharply divided between Manchu and Chinese, or North and South. The Manchu, or Northern, forces were manned and officered entirely by Manchus, and enjoyed privileges which were denied to the Chinese army. Nearly every Southern army was commanded by two generals, a Manchu and a Chinese, the Manchu being the real head.

The provincial armies are maintained at the expense of the viceroys. In the Province of Chihli, General Yuan Shih Kai's army, and the Imperial armies at and around Pekin, are maintained by the Board of Revenue out of {440} Imperial taxes; so that the Imperial armies permanently quartered round Pekin are State-paid. The generals in command of the Provinces administer their armies entirely according to their own discretion. As these officers are responsible for the payment and maintenance of the forces under their command, much of the money which should go to the army is apt to stick with its general.

When I mentioned these circumstances to the members of the Tsung-li Yamen, one of them blandly asked me if I included his army in my description.

I replied that his Excellency could not but be aware that he received supplies of pay, clothes and rice for an establishment of 10,000, although the actual number was one half or less; and that when his army was inspected, he filled the ranks by hiring coolies for the occasion. My response evoked an irreverent outburst of applause from the interested audience of coolies. "The English Mandarin," they cried, "knows all about our old mandarins! That is just what happens."

YUAN SHIH KAI

In October, 1898, I went to Hsiao Chao to visit Yuan Shih Kai, the high official who informed Yung Lu of the plot of the Reformers to seize the Empress Dowager, and so brought about the _coup d'état_. I remained two days and a night with the general; witnessed the parade of all his troops, and their manoeuvres, and examined their equipment and victualling. I was permitted to examine the pay-sheets, and obtained every detail connected with the establishment and maintenance of the force.

General Yuan Shih Kai is a Chinaman, and his army was composed of Chinese. It numbered 7400 men. They appeared to be smart, of fine physique, well fed, and their uniforms were well kept. Their parade and manoeuvres were smartly executed, their discipline was excellent. All their equipment was serviceable and efficient, with the exception of their artillery.

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It was on this occasion that I had a conversation with Yuan Shih Kai, which, in the light of subsequent events in China, it may be not uninteresting to recall.

Yuan Shih Kai expressed his anxiety concerning the future of his country; which, he said, was in a lamentable state of weakness, and which the States of Europe were desirous of dividing among themselves; and in this connection he was inclined favourably to regard the proposal to combine the various Chinese armies into one great Imperial force.

Upon that, I asked Yuan if he were acquainted with the history of China. Being one of the governing class, and therefore a scholar of the ancient meticulous pedantic class, he probably knew the whole of it by heart; and he replied in the affirmative.

"Then," I said, "have you not observed that every Chinese dynasty has been founded by a successful general?"

The man who is now (1913) President of the Chinese Republic looked at me impassive as a statue, and held his peace.

Yuan Shih Kai was well aware of the fact that throughout the East the ruler is always "He," never "They"; and for this reason he subsequently endeavoured, after the death of the Empress Dowager, to preserve the authority of the Emperor.

Years afterwards, before leaving England for China, Dr. Sun Yat-sen, who was accompanied by General Homer Lea of the United States, lunched with me. General Homer Lea was, I think, to conduct the reorganisation of the Chinese army.

ARMS AND MEN

The armies which I had the privilege of inspecting, or concerning which I obtained information, were: the army of General Sung, distributed along the coast about Kinchow, which apparently consisted of 10,000 men out of a paper strength of 20,000; the army of General Soon Ching at {442} Lutai, which was also at half strength, consisting of 7000 men out of 15,000, distributed among 30 camps, and having some Russian officers; and the army of General Tung Fu Chan, near Pekin, which was a disorderly and an undisciplined rabble; the army of General Nieh, which consisted of about 13,000 men, distributed among 30 camps between Hsiao Chao and Tientsin, with five Russian instructors; the Pekin Field Force, which was commanded from the Palace, and which consisted of 10,000 picked men, well armed but badly drilled; the cavalry camp at Kaiping, theoretically consisting of 1500 men, and having three Russian officers; and the army of General Yi Ke Tong, consisting of from 8000 to 15,000 men scattered about in Manchuria. I also saw the armies, or some part of them, of the Viceroys Chung Chai Tung, Liu Kwen Yi, Hsu Ying Kwei, Tau Chung Liu, and Kwei. Besides these, I was informed that there were in Mongolia 100,000 cavalry.

Among the various armies were distributed 14 different patterns of rifles, varying from the Mauser to the gingal. Some contingents were armed with bows and arrows; others carried bird-cages and fans, being distinguishable as soldiers only by their badge. The armies exhibited as many degrees of efficiency among themselves as their weapons.

Nevertheless, I came to the conclusion that here was all the material from which to evolve an excellent army. The Chinese have all the qualities of a good soldier: they are sober, obedient, quick to learn and courageous. The requirements were proper food, pay, clothing, drill and competent officers.

While I was at Newchwang I obtained what information was available with regard to the numbers and location of the Russian troops in Eastern Siberia and in Manchuria The total number was then about 12,000 men.

In the course of my inspection, at the Viceroy's invitation, of the powerful forts on the Yangtse River, I observed that one fort, which was intended to fire up the river, was so constructed that only one gun out of six could be trained in {443} the required direction, so that if the other guns were brought to bear, the guns' crews would be killed. The face of the fort, instead of being at right angles to the course of the river, was parallel to it. At my suggestion, a dummy figure was placed in position; a gun was fired in the required direction; and sure enough the shot blew the effigy to pieces and went wandering among the junks crowding the river. The Chinese said that the English Mandarin was the cleverest mandarin they had ever seen; and explained that the fort had not been built in the right position because the ground was swampy.

Among my observations of forts elsewhere, I noted a battery of 60-ton muzzle-loading guns, which were loaded by depressing their muzzles into the magazine. I ventured to suggest that any carelessness in sponging out the guns might result in the explosion of the magazine. The general said that the English Mandarin was extraordinarily clever; and explained that a year previously a magazine had been blown up for the very reason I had indicated, had killed forty-two men, and had then been rebuilt upon the same plan.

At another fort I noted that the powder used for the heavy guns was unsuitable, and ventured to suggest that it might burst the gun.

"Yes, it does," said the general simply. "We have lately blown the breech off two 12-inch 50-ton Krupp guns, killing and wounding thirty men." And he congratulated the English Mandarin upon his extraordinary powers of divination. After the general's explanation I understood how it was that in another fort two 12-inch Krupp guns were fitted with Armstrong breech mechanism. The Krupp breech having been blown off, the Shanghai arsenal had neatly fitted them with Armstrong breeches.

Observing that a powder-mill at Canton had open gratings for windows, and stood in the midst of a sandy plain, I ventured to suggest that the sand might blow in, and that a spark from it might cause an explosion.

"Yes, it does," said the mandarin. "It blew up two {444} years ago and killed and wounded twenty men." He added that although it had been rebuilt upon the same plan, it was not intended to use it again; and expressed his admiration for my remarkable penetration.

At one of the arsenals, the workman boring a 6-pounder gun had his speed too fast and his feed too thick, so that his machine was taking out chips of metal and jumping under the strain. My guide observed placidly that the man didn't seem to know how to do it. The European instructor, he explained, had left. I offered to replace him for the occasion; took off my coat; and being an old hand at the lathe managed to set the machine right in about an hour's work. Then there suddenly arose a great crying and calling among the coolies outside. I thought a riot was beginning; but the tumult was only the coolies in their innocent way screaming their delight that "the English Mandarin could do what their own old mandarins couldn't."

I drew up a report with regard to the forts and arsenals in China. The general conclusion was that enormous sums of money were being expended on war material which, in most cases, was totally useless, although the establishments were often capable, under European instructors, of turning out work which would compare with the best in Europe. Two or three of these arsenals, rightly managed, would serve to equip a million men for less money than was already being expended.

H.I.M. NAVY

I also visited the Chinese Navy, which was divided into two squadrons, the Peyang squadron in the North and the Nanyang squadron in the South. The Peyang squadron consisted of three cruisers, one torpedo cruiser, and one torpedo gunboat. The Nanyang squadron was composed of seven cruisers, four old gunboats, and four torpedo boats. The Fleet as a whole was undermanned, but there were many men who had been well trained by English instructors. The only dockyard is at Foochow.

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Many Chinese authorities having asked my advice as to the fleet, I recommended them to put their ships in order for police purposes, and to utilise them for the purpose of checking piracy; advised them not to spend any more money on their navy, because their army was of greater importance; and pointed out the waste involved in keeping about the coasts and in the river hundreds of man-of-war junks.

Throughout China, I found among the high officials at least an ostensible agreement with my views concerning the necessity of reorganising the army: agreement which was no doubt largely dictated by the very present fear of Russian aggression.

His Excellency Li Hung Chang, whom I visited, was an exception to the rule; for the great Minister, one of the Six Grand Secretaries, was growing old and infirm; and having offended the Reform Party, it was not improbable that he was looking to Russia to protect him in case the Empress Dowager's support failed him. His case was typical of the Chinese attitude, in which the regard for personal wealth and safety, threatened so subtly and from so many dark quarters, is naturally apt to override patriotism.

At the same time, China is one of the most democratic countries in the world. I have seen the great Li Hung Chang stepping into the Yamen over the bodies of the coolies, who refused to move and who chaffed him as he passed. I have seen a whole Council huddle up their fans and disperse like startled poultry, because a coolie put his head in at the door and exhorted the old gentlemen to be quick, because it was going to rain, and the coolies were going home.

It is the rule of the road in China that all passengers must give way to carriers of burdens, and it was enforced without respect of persons. Being carried in a sedan, with four bearers and four coolies running alongside, I was horrified to perceive the head coolie incontinently knock down an {446} old mandarin who was in the way. The poor old gentleman rolled over and over, Red Button and all; and when he arose, his gorgeous silks all befouled with mud, the coolie spat in his face. China is full of the unexpected.

HIGHLY COMMERCIAL

As already explained, the two aspects of my investigations, the military conditions and the commercial conditions, are here treated separately for the sake of simplicity, although at the time they were necessarily conducted together. The following brief account of the results of my inquiries into the state of trade and commerce contains those particulars which may still retain their interest.

From Pekin I went to Tientsin, where I attended a meeting of the Chamber of Commerce, which vehemently protested against the "Sphere of Influence" policy, declaring that the future trade of Tientsin would be entirely dependent on preserving the integrity of China, and upon the existence of a guarantee of the policy of the "Open Door." The British section of the Chamber of Commerce presented to me a memorandum, which they desired me to transmit to the Associated Chambers of Commerce in England, protesting against the absence of any definite policy, and stating that considerable anxiety existed with regard to the safety of capital already invested in China. The fear of Russian aggression had virtually paralysed the movement of capital in the northern part of China. The general opinion was that if the "Open Door" policy were established and secured, these apprehensions would disappear.

I was most courteously received by the Chinese authorities at Tientsin, who expressed great friendliness towards Great Britain; and who, as usual, affirmed that China was helpless and that all the European countries were taking advantage of her weakness. In the case of Russia, they stated that concessions were being demanded throughout the whole country which China was unable to refuse.

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From Tientsin I went to Tongshan, travelling upon the Shanhaikwan railway, which had been built by Scotch engineers under the direction of Mr. Kinder, a British subject of great talent and energy, who had married a Japanese lady. Of the two people whom I met who seemed to me really to possess an intimate knowledge of China and the Chinese, Mr. Kinder was one. The other was Dr. Morrison, _The Times_ correspondent.

With Mr. Kinder's assistance, I collected the whole of the statistics regarding the working of the Tongshan railway workshops, of the Shanhaikwan railway, and of the coal mine, in which Chinese miners were employed under European foremen.

Upon my arrival at Newchang, I was received by the British residents. The British merchants here, like the others elsewhere, wished me to represent to the Associated Chambers of Commerce of Great Britain that trade in the North of China must be secured against foreign aggression, and transmitted to me a number of resolutions to this effect.

The Russians had settled at Newchang, taking the land without permission, and paying the native occupiers nominal prices. Since 1897 the Russians had been pouring troops into Manchuria, and their number was steadily increasing. I prepared a detailed report upon the trade of Newchang.

Chefoo I visited twice, first on 13th October and again on 9th November. The British merchants here complained of the extension of German interest, which began with the opening of Kiao Chao. I thought, however, that their alarm was not justified. Kiao Chao had been declared by Germany to be an open port.

Upon visiting Wei-hai-wei, I observed that with a comparatively small expenditure of money it could be made into a most efficient and powerful naval base. Already, in the few months which had elapsed since the British flag was hoisted on 24th May, 1898, Commander {448} E. F. A. Gaunt (now Commodore Gaunt, C.M.G.), in command of a party of bluejackets and Marines, had accomplished a most admirable piece of administrative work, in cleaning up the place and in enforcing law and order so tactfully and skilfully that the only punishments inflicted had consisted in docking the pigtails of two offenders. There were no guns mounted at Wei-hai-wei; but at Port Arthur, 80 miles distant northwards across Korea Bay, the Russians had already mounted seventy guns.

I also observed that the island of Wei-hai-wei, which is two-thirds the size of Gibraltar, was the best place on the China Station for the establishment of a sanatorium for the Fleet.

My visit to Kiao Chao was made in response to a cordial invitation sent to me by Rear-Admiral H.R.H. Prince Henry of Prussia. The harbour is a difficult place for vessels to make, particularly in foggy weather. The Germans were as busy as bees, clearing the ground, building barracks, making parade grounds and preparing emplacements for guns. Prince Henry was most kind to me, and showed to me everything. His administration and organisation were admirable; and afforded another example of the achievements of naval officers.

But the place was still under military rule, which discourages commerce. On my voyage out, three Germans had come on board at Singapore. They told me that, although they had been very happy under British rule, they preferred their own colony, and intended to start a hotel at Kiao Chao. Some time afterwards I met those three patriotic Germans again. They were on their way back to Singapore; because, so they said, they could not make a living at Kiao Chao! They told me that they were obliged to pay a tax of five per cent. upon their investment, with the prospect of paying another five per cent. when, after a period of years, their property should again be surveyed.

At Shanghai, which, being situated at the entrance Of {449} the Yangtse Valley, is the most important Treaty Port in the Far East, I framed an elaborate report upon its trade. The China Association presented to me a memorandum containing the usual protest against the insecurity of British interests in China.

While I was at Shanghai I had three interviews with the Marquess Ito, lately Prime Minister of Japan. The Marquess, I believe, was unofficially employed in endeavouring to extend Japanese interests in China. He expressed the greatest friendliness towards Great Britain. During the political disturbances in Japan, the Marquess Ito had fled to England as a sailor before the mast in a British vessel. He told me that, landing at Gravesend very hungry, he went into a shop and bought a loaf, putting down half a sovereign. The shopman, presumably taking advantage of the fact that he was a Japanese, refused to give him the change. The Marquess told me that he was sadly shocked; for, until that moment, he had believed the English to be the most honest people in the world.

In Shanghai, I learned that one of the leaders of the Reform Party, Huang Chin, a victim of the _coup d'état_, had been arrested and was about to be sent to Nanking for execution. I urged his Excellency Kwei Chun, Viceroy of Szechuan, to use his influence to save Huang's life, pointing out to him that these political executions were exceedingly distasteful to the British people. I am glad to say that my intervention was effectual, in that Huang Chin, instead of being executed, was banished.

His Excellency Liu-Kwen-Yi having most courteously placed H.I.M.S. _Nanshin_ at my disposal, I took passage in her to Nanking.

I was much interested in the arrangement and armament of the Chinese man-of-war; but as she was warmed by means of charcoal stoves, my investigations were conducted in a condition of partial suffocation from the fumes.

Upon arriving at Nanking in the Nanshin, I received a salute of fifteen guns; and proceeded to the Yamen of his {450} Excellency the Viceroy Liu-Kwen-Yi between the lines of troops and banner-bearers, numbering some thousands, who were ranged along the whole route of four and a half miles in my honour. Liu-Kwen-Yi, who received me with the greatest courtesy and kindness, said that he was anxious to show his friendship for Great Britain in every way. In the course of two long and interesting conversations with the Viceroy, who expressed his fear of the present unstable posture of affairs, I suggested that there were two contingencies to fear: a rebellion against the Government and an insurrection against foreigners; either of which would be fatal to commercial security. His Excellency, however, assured me that there was no danger of disturbances inspired by dislike of the foreigner. Herein he was mistaken; for within two years occurred the Boxer outbreak, which had the approval, secret or overt, of the Empress Dowager. At the Viceroy's request, I drew up a memorandum containing my scheme for the reorganisation of the army on the principle of the Imperial Maritime Customs, which I had proposed at Pekin. A translation of this document was sent by the Viceroy to Pekin.

On my return journey, I inspected the army, the fleet, the arsenal and the Imperial naval college.

I arrived at Hong Kong for the second time on Christmas Day, 1898. The views of the China Association and of the British merchants here were of the same tenor as those, already described, expressed by the British communities at all the trading centres visited by me.

To complete my itinerary in brief, other places visited by me were Wuhu, Kinkiang, Chinkiang, Kiangzin, Hankow, Foochow, Swatow, Amoy, Canton, and Wuchow. At each place I drew up a report describing the local conditions and embodying the representations of the British communities.

Their common complaint was that British trade was declining. But an examination of the detailed reports which in response to the letters sent by me beforehand, were ready for my inspection, showed that on the contrary the branches {451} of trade already possessed by the British had increased; and that it was in new branches started by foreign nations that the British were not succeeding. Their comparative failure in this respect I held to be partly due to the fact that foreign nations supplied what the people wanted, while the British insisted on trying to sell to them what the British thought they ought to want.

CONCLUSION

The following reports were framed by me: report on the railways and waterways; report upon the British Consulate; a general comprehensive report upon Trade, Treaties and Tariffs; and a highly elaborate report upon the complicated question of Finance and Currency. All these are set forth in my book, _The Break-up of China_, which also includes a summary of the reforms which appeared to me to be most requisite. These were:--

1. An Imperial coinage.

2. Reform in the method of collecting the land-tax.

3. Removal of restrictions on the export of grain.

4. Modification of the laws governing the salt monopoly.

5. The right of foreigners to reside in the interior for purposes of trade.

6. The registration and protection of trade marks and copyright.

7. The removal of the remaining restrictions on inland water navigation.

8. The abolition of the likin, or a change of administration which would ensure that likin should be collected once only.

9. Greater facilities to be given to respectable foreign syndicates to work minerals.

10. The establishment of reformed departments for the regulation of finance, railways, waterways, roads, posts and telegraphs, and a bureau to deal with all questions connected with trade. The existing {452} telegraph service was so bad, that a letter sent from Tientsin to Shanghai has been known to arrive before a telegram sent at the same time. _The Times_ correspondent at Pekin told me that his telegrams very often cost as much to send from Pekin to Shanghai as from Shanghai to London.

11. One other bureau was urgently needed, a Trade Intelligence Department, to deal with scientific and practical questions relating to the natural products available in China for commercial purposes. What is an insignificant export to-day may become a valuable article of commerce to-morrow. There should be a scientific classification of the products of China on the same lines as the classification of products in India.

I may here quote what, in relation to the whole matter, I wrote at the time:

"If it be said that my policy for the reorganisation of the Chinese army and police is a warlike policy, I reply that it is the only plan yet suggested which gives any guarantee of peace. Great Britain's strongest guarantee of peace has been the reorganisation of her Fleet. Without peace commerce must perish. To keep the peace, authority must be properly equipped. Our choice with regard to the Chinese Empire is simple: we may choose to wreck or we may choose to restore."

The resolutions passed by the British mercantile communities and the many letters I received from them subsequently, testify to their approval of my recommendations. The following documents express the sentiments of the Chinese themselves, and of the foreign merchants:

"At a meeting of Chinese merchants and traders, and other Chinese gentlemen resident in Hong Kong, held at the Chinese Chamber of Commerce on 22nd January, 1899, on {453} the motion of Mr. Ho Tung, seconded by Mr. Leung Shiu Kwong, it was resolved:

"'1. Having closely followed with great and attentive interest, and carefully considered what Lord Charles Beresford has said and done in China in connection with his recent mission on behalf of the Associated Chambers of Commerce, we, the Chinese community of Hong Kong here assembled, are in accord with and heartily support the policy the noble lord proposes in regard to the "Open Door" as regards commerce, and also with regard to the reorganisation of the Chinese army.

"'2. That we recognise the combined proposals, if carried out, will benefit China quite as much as, if not more, than England, and other nations, in her trading interest, and we therefore hope that Lord Charles will be intrusted by the British Government with the carrying out of the views he has so closely enunciated, as we, the Chinese people of Hong Kong, observe that his efforts are directed to the benefit of both his country and our country, and to the benefit of the trade of China and the trade of England.

"'3. That we recognise and make our cordial acknowledgments for the sympathetic manner with which he has approached our country; and

"'4. That we desire emphatically to express our full confidence in Lord Charles Beresford, whose ability, integrity and zeal we are sure peculiarly fit him successfully to carry out the proposals he has made for the furtherance of trade and the preservation of the Chinese Empire.'

"(Signed) Lo CHI TIU, Chairman H. O. FOOK, Secretary"

The General Foreign Commercial Community of Shanghai, on 8th January, 1899, passed the following resolution:

"That our cordial thanks be tendered to Lord Charles Beresford for the service he has rendered to the foreign communities in China by personal investigation into the conditions of the various interests we represent."

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Upon my return, I represented what I believed to be the real posture of affairs in China, when the subject was discussed in the House of Commons. In November, 1899, I read a paper upon "Engineering in China" before the Institute of Mechanical Engineers.

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