File No. 893.00/2838
The Minister in China ( Reinsch ) to the Secretary of State
Sir: I have the honor to submit the following report on the general political situation in China during the first quarter of 1918:
1. POLITICAL INFORMATION
A. Domestic
(1) Political observations and developments
The conflict between the Southern and the Northern military leaders continues to be the principal matter of public concern in China. The Northern element, centered in Peking, has for its most active parts a group of military men who follow the lead of Gen. Tuan Ch’i-jui (Anhui party) and the more or less closely allied group of Northern militarists led by Acting President Feng Kuochang (Chihli party). In each of these groupings again are many personal rivalries and discordant aims. This predominance of personal aims and motives is even more marked among the Southern party. Aside from the civilian elements, led by Dr. Sun Yat Sen, whose influence has been declining, and Dr. Wu Ting-fang, there are a number of military leaders who cooperate against the North in a loose way but have not formed a unified, responsible organization. The result is that a definite statement of policies and aims by leaders, who would be responsible for the carrying out of any compromises arrived at, and who would have the actual power to carry out such compromises, is not to be obtained.
During the early part of the quarter, Acting President Feng Kuochang was still attempting to carry out his conciliation policy. The circumstances of his trip to the northern provinces have been reported [Page 90] in my despatch No. 1905, of February 12, 1918; since then the Acting President has remained rather more in the background.
At the end of February there was engineered, with the cooperation of Maj. Gen. Hsü Shu-cheng, the principal follower and assistant of General Tuan, a movement of the troops of General Chang Tsolin, military governor at Mukden, towards Peking. At the same time, these troops were supplied with arms and ammunition recently bought from Japan, which were seized by the troops at Chinwangtao, the port where these materials were being landed. As subsequent events showed, the motive of this military movement was to force the reappointment of General Tuan Ch’i-jui to the premiership and to give active support to his policy of military action against the Southern forces in the Province of Hunan. As the appointment of General Tuan’s assistant, Fu Liang-tso, to the governorship of that province, in 1916, had been made the chief point of resistance on the part of the Southerners until they had ousted General Fu, General Tuan’s party considered the reoccupation of Hunan as essential in order to protect the authority and standing of their leader.
General Tuan Ch’i-jui assumed the office of Premier on March 23, 1918. There was no general remodeling of the Cabinet. Wang K’omin, Minister of Finance, to whom the new Premier was particularly unfavorable, left office; Ts’ao Ju-lin, already Minister of Communications, assumed concurrently the headship of the Ministry of Finance, with the result that the two most important ministries were put in charge of the leader of the pro-Japanese party in the Government. The remaining changes in official positions were of minor importance.
Premier Tuan stood for the energetic prosecution of military action against the South. The troops of Chang Tso-lin were forwarded to Hunan. The Southern troops receded to the south beyond Changsha; meanwhile, internal disharmony in the Northern military party again became more pronounced. The so-called Chihli faction seemed to fear that the immediate followers of Tuan, under the leadership of General Hsü Shu-cheng, would entirely gain the upper hand. At the end of the quarter, notwithstanding the slight withdrawal of the Southern troops, the settlement of the internal difficulties of China had not been greatly advanced.
As a result of the political disorganization, conditions in the interior of many parts of China became very unsettled. While the main body of the population gives little attention to political matters and goes on in its normal work of industry, commerce, and agriculture, so that such a thing as general unrest does not occur, yet, the disorganization of the central authority, together with the incapacity of many of the military generals properly to control their own followers, leads to a great deal of local uneasiness and suffering. Not only was the peaceful population harassed by the advancing or retreating soldiery, but even in regions remote from the actual scene of combat, the soldiery was often unruly and extortionate in its demands on the civil population, while brigandry flourished in extensive regions.
In several cases foreigners were made to suffer in consequence of the conditions described above. Attacks were made by snipers along [Page 91] the Yangtze River on both naval and merchant vessels of foreign nations, resulting in the case of the United States steamship Monocacy losing by death a naval gunner, and the slight wounding of two men of the crew. The captain of one of the British merchant steamers was killed. Five American citizens were kidnaped: three near the southwestern portion of Shantung, and two in the Province of Honan. The former were promptly released but one of the latter, an American railway engineer, remained in the hands of the bandits for six weeks. A ransom was demanded; finally the military cordon was drawn so closely around the bandits that the release of the captive was obtained. Three Japanese were kidnaped in Shantung Province. A British missionary was killed by robbers in the Province of Fukien. These instances show a dangerous weakening of the central authority.
(2) Attitude toward the war
The Chinese Government continued to manifest a complete willingness to cooperate with its associates in the war, and to take such measures as seem to be necessary for the protection and advancement of the common interests. It was only the difficulty of transportation which stood in the way of the sending of a Chinese military expedition to take part in the fighting on the western front. The Chinese Government had created a War Participation Bureau, at the head of which General Tuan Ch’i-jui was placed. This bureau considered all questions relating to the war and prepared plans for an active military participation. When through the internal difficulties in Russia and the making of a separate peace with Germany, the danger arose that German or Austrian prisoners of war might give trouble in Siberia, the Chinese Government took such military and other measures as seemed advisable in order to anticipate danger from that source.
B. Foreign
(1) Relations with foreign countries
The diplomatic relations of China are primarily determined by the fact that the war exists, and that China is a cobelligerent. The relation between China and her associates in the war has been uniformly friendly. No difficult or important questions have arisen between China and the European nations or the United States, diplomatic intercourse being confined to the settlement of routine matters. It is different with the concerns of China with her neighbor. The Japanese Government has chosen this time for an attempt to establish the ascendency of Japanese influence in Chinese affairs. While any intention to interfere in Chinese domestic affairs has been officially disavowed, nevertheless a loan of fourteen million yen was made in January for the purpose of supplying the means for a large purchase of arms from Japan on the part of the Central Government. At the same time, however, relations were maintained with various provincial authorities in the North and the South, and many local loans were consummated, secured upon properties, concessions or taxes in the respective provinces. When a separate peace had been [Page 92] concluded between Russia and Germany, negotiations were initiated by the Japanese Government with China, through the Chinese Minister at Tokyo, for the avowed purpose of devising a method for cooperation in any military action which might be taken in Manchuria and Siberia. An exchange of notes took place early in March in which the common interests of Japan and China with respect to the Siberian situation were stated to afford a ground for a more specific understanding with respect to the means of protecting the said common interests. Secret negotiations were carried on throughout March, without coming to any conclusion during the quarter. The fact that the negotiations were kept absolutely secret and surrounded with every possible protection to maintain their secrecy, did not make a good impression and led to many reports concerning demands advanced by the Japanese Government, which were probably in some instances exaggerated but which served to arouse great apprehension and considerable ill feeling among the Chinese public. Arrangements were completed for having Baron Sakatani, ex-Minister of Finance, a noted expert in financial matters, come to China, with a view of securing the appointment as adviser on matters of currency and finance.
In the Chinese Government there were several influences strongly favorable to Japan. General Tuan Ch’i-jui himself had in July 1917 been enabled to overthrow the monarchical coup of Chang Hsün with the aid of Japanese financial assistance. He had been made to feel quite thoroughly that the Japanese could either assist materially or raise formidable obstacles, according to whether they did or did not approve of any given public man or administration. He was therefore predisposed to conciliate the Japanese Government and to encourage active friendly relations with the Japanese. Ts’ao Ju-lin, the chief of the pro-Japanese party in China, as already stated, was placed at the head of the two important ministries of Communication and Finance. The Acting President seemed to rely greatly on his Japanese advisers. The avowed tendency of the Government was favorable to establishing closer relations with the neighboring country.
The decision of the Japanese Government to introduce a “civil administration” in what is now designated as the Shantung Railway Zone has aroused the greatest concern and apprehension among the Chinese. Under the arrangements with the German Government, no railway zone existed. The railway concession was indeed originally accompanied with the priority right to mine within a certain distance (thirty li) on each side of the railroad. This right of preference had, however, been relinquished by the German Government before the beginning of the war. The Japanese regulations for a civil administration establish a railway zone along the Shantung line and make it appurtenant in every branch of the administration to the Leased Territory of Kiaochow. The fact that the administrative regulations deal with such matters as taxation, construction of roads, forestry and mines make it appear that permanent administrative arrangements were aimed at. For this reason the strongest remonstrances were made by public bodies in Shantung and elsewhere in [Page 93] China against the measure in question. The Japanese Government on its part declared that the measures were purely temporary, which statement failed to satisfy the Chinese Government or public, or to allay apprehension.
In connection with the entry of China upon the war the Governments of the associated belligerent powers gave to the Chinese Government the assurance of their assistance in securing an immediate arrangement under which the Chinese Government would be enabled to collect the 5 per cent effective customs duty, guaranteed under existing treaties. The valuations upon which the present collections are based were made in 1902; on account of the enormous increase in prices, the collections at present amount to only about one half of the percentage guaranteed under the treaties. In consequence of the above compromise a customs conference was convened at Shanghai early in January. It did not, however, succeed in even effectively beginning its work during the first quarter because no agreement as to the basis of valuation could be arrived at among the powers. The Japanese Government insisted that the values of merchandise during the years 1912, 1913, 1914, 1915 and 1916 should be the basis of the new duty. On the part of the Chinese Government it was alleged that under this arrangement the effective 5 per cent duty guaranteed by the treaties would not be obtained.
(2) Attitude toward the United States and Americans
There was no change in the customary friendly attitude toward America. However, the exchange of notes between the Secretary of State and Viscount Ishii was quite generally interpreted as indicating a withdrawal of the American Government, in favor of Japan, from any desire to exercise any influence in Chinese affairs. The term used in Chinese to translate the expression “special interests,” makes that expression much stronger than it is in the English language; it implies in fact the idea of a special or predominant position. The popular conception, even among officials, was therefore that the United States had agreed to give to Japan a free hand with respect to everything related to China. While a different view concerning the note is held by a few public men who are especially conversant with foreign affairs, the impression produced upon the majority—which was further encouraged by the current Japanese interpretation and by the fact that the Japanese Legation lost no time in acquainting the Chinese Government with the existence of the note before its publication—was that the American Government had no desire to interest itself in Chinese affairs, and that on their part the Chinese would therefore be wise to look to other quarters for tolerance and support. The result was one rather of disappointment than of indignation against the United States. While well-informed leading men were convinced that no material change had taken place in the policy or attitude of the American Government, yet it was impossible for them to counteract the popular understanding which had arisen.…
I have [etc.]