File No. 893.00/2405

Minister Reinsch to the Secretary of State

No. 1031

Sir: In continuation of my despatch No. 1015 of the 4th instant, I have the honor to enclose, for your information, copies of despatches from various consular offices in China, dealing with the political situation.2 There are also clippings from the Peking Gazette of April 4, 5, and 10,2 the Peking and Tientsin Times of April 15,2 and the Peking Daily News of the 18th instant,2 illustrating the political situation as follows:

On account of the lack of absolute security in the mails, it will be impossible for me to go into details concerning the alignment of various prominent officials and public men in connection with the problems of the day. While there is a temporary unity among the forces of opposition, centered upon hostility to President Yuan Shih-kai, yet all observers agree that were the President suddenly to retire without having made adequate provision for a regular devolution of governmental powers into other hands, it is likely that bitter factional struggles would arise. It is to be hoped that the constitutionalists will determine upon a definite and unified policy both with respect to measures and men. It is believed that were the Chinese left to settle the matter, they would probably at present not return to armed conflict, but continue the discussions and negotiations until some basis of permanent adjustment had been found. From all parts of China, however, it is reported that the more radical revolutionaries are receiving encouragement and even protection and assistance from individuals and officials belonging to another nation.

The most cardinal specific facts upon which the situation at the present time hinges are the following: the refusal of the Yokohama Specie Bank to pay over to the Chinese Government the surplus from the current income of the salt revenue, a procedure which the banks of the other four Powers concerned may have to adopt in the future in the face of the fact that one of the parties has thus pointedly declared a lack of confidence in China’s credit; the impossibility of obtaining in foreign markets large loans until conditions shall have become more settled; refusal of the China Merchants’ Steam Navigation Company to convey Government troops on the Yangtze and along the coast; and the declaration of independence of Chekiang Province, with the flight of General Chu Jui, one of the most trusted military governors in the Yangtze Valley.

Surmises as to the future development of affairs differ greatly. The leaders of the opposition are expecting, during the present week, a joint manifesto, on the part of the military governors in central China, calling on President Yuan to retire. There is, however, as yet no concrete evidence of the formation of an adequate organization among military and other political leaders for the purpose of carrying on the Government and unifying the country should the President retire. The present is the supremest test of the faculty [Page 77] of the Chinese for political organization that they have as yet undergone.

The local situation in Peking is entirely dependent upon whether the President without adequate means will be able to control the military, and whether, should he retire, an adequate organization would have been effected for the control of public affairs.

I have [etc.]

Paul S. Reinsch
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