File No. 893.00/2533
Minister Reinsch to the Secretary of State
Peking, September 4, 1916.
Sir: In continuation of my No. 1155 of July 31 last, I have the honor to report on the political situation of the Central Government.
The Parliament assembled and was organized in both Houses on August 1. The members have since been occupied mainly in putting themselves in touch with each other and with the political conditions. A great deal of negotiation has gone on, back and forth, between members of Parliament and the Cabinet, especially the Premier and those members of the Cabinet who are also members of Parliament, such as Sun Hung-yi and Ku Chung-hsiu. These discussions and transactions have thus far revolved mainly about the question of the confirmation of the Cabinet by Parliament, and about the permanent relations to be established between the two bodies. The Cabinet was approved in full by the House of Representatives on the 1st instant and by the Senate to-day.
The Cabinet was not confirmed as a unit, but each member was individually voted on, the Representatives exercising their personal judgment in each case. The weakest support was given to the Minister of the Navy and the Minister of Communications. In the case of the former the opposition was due to the fact that the members of Parliament would have preferred to see Admiral Li Ting-hsin, who engineered the declaration of the independence of the navy in June, appointed to this post.
The opposition to Mr. Hsu Shih-ying, the Minister of Communications, was due to more deep lying causes. Very bitter attacks were made on this official in the press, of which some of the cuttings herewith enclosed are examples.2 He was attacked both on the score of alleged lapses in the past and on the manner in which he had reorganized his Ministry. A short time ago His Excellency Hsu Shih-ying announced that he had effected economies to the extent of $900,000 a year in his Ministry by means of dismissing superfluous employees and by consolidating bureaus and departments. He had, however, in the process of doing this dismissed a number of the most prominent officials in the Ministry who were favorably known for experience and competence, and had replaced them with persons about whom there was no such favorable knowledge. The criticisms which were leveled against him, however, had a deeper cause. It was believed that he had undertaken to control all the branches of the important Ministry of Communications in favor of the Anhui Group, i. e., the immediate personal followers of the Premier; in other words, that he was acting in favor of the Military Party as opposed to the interests of the parties whose strength lies in Parliament. It is stated that the Premier used his entire personal influence to insure the confirmation of his excellency Hsu.
Mr. Chang Yueh-tsen, nominee for the Minister of Justice, had become involved in the opium scandal in Shanghai, in connection with [Page 93] the seizure of a large quantity of opium in the baggage of the party of Yunnanese politicians with whom Mr. Chang arrived in Shanghai. He has stoutly maintained his innocence in this matter, and evidently the Government is sharing his point of view, although it has not made an altogether good impression that a man who has not been entirely cleared before the public from suspicion of complicity in so disgraceful an affair should have been made a member of the Cabinet.
During the first month of its renewed life the Parliament has not done anything to justify the unfavorable expectations of its critics: it has not acted in a radical or irresponsible fashion, and its members subordinated their private and partisan views to the urgent need of national unity and cooperation. The Military Party has little confidence in the ability of the Parliament to improve the national situation, but they are pursuing a waiting policy and are giving Parliament a chance to show what it can do. In case general incapacity should reveal itself, the military element would undoubtedly strive to take matters in hand and would bring back that group of more experienced officials who were recently ousted. Current reports concerning the action of the new Parliamentary Ministers are not very reassuring; in the case of two or three of them there seems to be a venality abnormal even in China. Should such tendencies be given free rein, the downfall of the present régime, after the creation of added confusion, would be inevitable. The better element in Parliament and in the press are striving to counteract and eliminate such evils. There are numerous indications that beneath the surface a very strong and widespread movement is going on to the end of organizing a monarchical movement with the assistance of the Military Party, and that should the present Government come to an impasse such a movement would be launched. The organizers of this movement are receiving encouragement from Japanese sources and many of the most experienced observers believe that a restoration of the Manchu House would be welcome to the Japanese Government.
The financial situation of the Government is very difficult. The provinces have not as yet been prevailed upon to give adequate financial support to the Central Government; in fact, a great many of them are making insistent demands for the repayment of expenses and losses incurred during the recent revolution. The two national banks have not found it possible to resume specie payment of their notes issued by the Peking branch. In order to meet the urgent needs of the Government there has been a continuous new issue of Bank of China notes, amounting to about silver $5,000,000, during the last two months. It seems unlikely that financial stability can be restored without a foreign loan; the amount needed to effect this result is, however, relatively small considering that the underlying economic conditions of the country are sound, waiting only for the reestablishment of national credit, in the event of which very considerable business activity would be resumed in all parts of China.
As at all times, the domestic situation in China is overshadowed by dangers threatening from abroad. All parties seem to be persuaded that a policy of friendly cooperation with Japan within [Page 94] limits is desirable. The radical revolutionaries, as well as many of the moderates, including his excellency Tang Shao-yi, have given frequent expression to their complete trust in Japan and their desire to cooperate with that country. Even the leaders of the Military Party realize the necessity of working to a certain extent in that direction. The Japanese, on their part, have been playing soft tunes of friendship and mutual helpfulness.
There are also enclosed herewith a number of cuttings from the Peking Gazette2 which are reports of the action of the National Assembly, or discussions of the relations between the Cabinet and Parliament, and of current politics. There is also a copy of an interview with Mr. Liang Chi-chao, dealing with these matters. In this connection, I also have the honor to refer to the articles published in the August number of the Far Eastern Review, of which only an advance copy has so far reached the Legation.
I have [etc.]