File No. 893.00/2868
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 second quarter of 1918:
1. POLITICAL INFORMATION
A. Domestic
(1) Political observations and developments
The political situation in China is unchanged in its main outlines, although there has been development in details and the general progress of events has produced some important results and brought others out more clearly. Political interests have centered in the struggle between the Northern and the Southern parties, in the rivalries within the Northern military party itself, and in the election of a new parliament preparatory to the presidential election.
The so-called Communications Party (Chiaotung clique) began to participate more prominently in political affairs with the return from exile, in foreign parts and concessions, of the promonarchy leaders under Yuan Shih-k’ai, the chief of whom are Liang Shih-yi, Chow Tze-chi, and Chu Ch’i-ch’ien. Mr. Liang Shih-yi returned with his old prestige only slightly dimmed by the ill success of the monarchist [Page 102] venture. It was believed that he had a definite plan for the reconciliation of the North and the South, and that he had made arrangements with the principal Southern leaders looking toward peace. However, while he was undoubtedly seeking a way to restore national unity, the expectation that he had a plan ready-made was unfounded. It is believed that he is working for the restoration of a civilian government, to which the military shall be in proper subordination. He therefore favors a reduction of the army and complete separation of military from civil affairs. In the question regarding Parliament he appeared to consider a new election under the old law the best solution, a conclusion in which a great many impartial persons concur. He however realized that the Government had so committed itself to a new parliament that it would be difficult for it to withdraw.
Notwithstanding the efforts made by all civilian leaders to bring about a condition favorable to compromise and settlement of the national difficulties, the military persisted in their desire to make a show of force against the South. The Premier, General Tuan Ch’i-jui, argues that any cessation of military action would be interpreted as weakness which would merely encourage the South to make more extravagant demands and to encroach further upon the Northern territory. In his view the question of authority must be settled once for all by imparting to the military movement against the South adequate force. For this purpose money is essential. If domestic revenue is insufficient, foreign loans must be resorted to. The sooner national unity is restored by force, the sooner will it be possible to repay these loans and to establish a system of sovereign control which will reform the army, protect the people and make the country prosperous. Being fully persuaded of the wisdom of this policy, in fact of its inevitableness, the Premier, encouraged by all of his followers, persisted in his course. It can not be overlooked that there exists in China a type of military generals who manipulate their forces from their yamen, and to whom the system of making war at home, with moderate risk of actual fighting, by methods which involve the use of money more than of bayonets, is a pecuniary business rather than a profession. Such leaders communicate their spirit to their soldiery, for whose acts they should be held responsible.
In the course of the month of April the Northern troops in Hunan Province were considerably reinforced, and some military action took place. The behavior of the troops under both the Northern and the Southern generals of the Province of Hunan in their action toward the civil population, was cruel and barbarous in an extreme degree. The looting of the city of Liling by Northern troops was a particularly outrageous instance of cruelty to their own nationals by a body of troops which had not distinguished themselves by warlike action in the field. It is, however, necessary to distinguish: there are several generals, such as for instance Generals Wu P’ei-fu and Feng Yü-hsiang, who not only exercise adequate control over their men, but also act on the principle that it is the business of soldiers to fight. The havoc wrought on the local population by the military in Hunan was so terrible that fully one fourth of the area of the province, and that the most populous part, was totally devastated. The fighting in Hunan fluctuated back and forth. In many instances [Page 103] there is a strong suspicion that financial rather than military means were employed against the enemy, the soldiery recouping itself by robbing the civilian population. From a political point of view this fighting did not bring any decisive results, even locally, during the present quarter.
In the Province of Kwangtung, General Lung Chi-kwang, who had for a time emerged from his refuge on the island of Hainan and made an attempt to establish himself again on the mainland, was defeated and expelled. He went first to Hong Kong and then to Peking, where he attempted to raise a foreign loan of five million dollars on the mining resources of the Province of Kwangtung, of which he had lost control absolutely. Negotiations for this loan with Japanese interests are not yet entirely completed.
Among the Southern leaders there prevails great lack of harmony and of unity of action. There is the same desire of the military to control as is found in the North. Dr. Sun Yat-sen, who resigned from the position of generalissimo of the Military Government in May, expressed himself as most discouraged at the actions and methods of the militarists, both in the North and the South. On May 18, the old National Assembly, in extraordinary session at Canton, passed a bill providing for the reorganization of the so-called Military Government. Among those elected as directors of the administrative council under this measure were General Lu Jung-t’ing, the most prominent military commander of the South and inspector general of the two Kwang Provinces; Mr. Tong Shao-yi; Dr. Wu Ting-fang; Dr. Sun Yat-sen; General T’ang Chi-yao, military governor of Yunnan; and two others. It does not appear, however, that an organization capable of united action was thereby created.
In view of the slight progress made by the Northern forces of Hunan Province and elsewhere, a conference of the tuchuns was held at Tientsin during the second half of June. It was believed that this conference would be favorable to a peaceful settlement. Generals Ts’ao-k’un of Chihli, and Chang Huai-chih of Shantung, appeared particularly desirous for peace. They had been nominally in command of the forces in the Province of Hunan. The influence of the Chiaotung Party was also known to be favorable to peace. The military supporters of General Tuan Ch’i-jui, namely, General Ni Shih-ch’ung, General Chang Tso-lin of Fengtien, and particularly General Hsü Shu-cheng, the principal lieutenant of the Premier, were however strongly in favor of the continuance of military action. Their proposal was that the war should be carried into Kwangtung itself by means of a military expedition carried from Tientsin and other northern ports by sea. This was the plan suggested by General Lung Chi-kwang, who is anxious to recover his hold. Though necessarily requiring great sums of money, and though full of doubtful contingencies, this plan impressed the most radical militarists so favorably that they adopted it. Outside observers fear it is only another chance to waste public money.
The Acting President will undoubtedly continue to be favorable to a peaceful settlement. It was believed that General Ts’ao-k’un would follow the attitude of the Acting President with whom he was more or less allied. The tuchuns in the Yangtze Valley, particularly General Li Shun, of Kiangsu, were with the Acting President in [Page 104] favoring peace. But General Ts’ao-k’un was won over by the Tuan party and concurred in favoring the Kwangtung expedition policy. He is a candidate for the position of Vice President. The question was whether he would associate himself with the party of General Feng Kuo-chang or with that of Tuan. He chose the latter alternative. This brings up the matter of the presidential election, which was closely bound up with the war question.
During the past two months elections have been going on for senators and members of the assembly in a new parliament under the election law passed in January last. These elections have been characterized by a great amount of bribery. The cost of getting a member elected to either house is quoted at between twenty thousand and thirty thousand dollars. There are some electorates not accessible to such methods, and a number of distinguished and respected men have been elected. On the whole, however, the public has taken so little interest in the election that it has been left to be manipulated as a game of the militarists and politicians. The competition has been chiefly between adherents of the Acting President, General Feng Kuo-chang, on the one hand, and the adherents of General Tuan Ch’i-jui on the other. Between the two stands the capitalist Chiaotung party, which, though friendly to General Tuan, prefers sovereign rule and favors ex-Premier Hsü Shih-ch’ang for the presidency. For the purpose of manipulating the elections a so-called Anfu Club was formed at Peking. It is at present claimed that the adherents of General Tuan and Hsü Shih-ch’ang will have a large majority, and that H. E. Hsü Shih-ch’ang will be elected, as General Tuan will withdraw in his favor. It is not yet absolutely certain whether enough provinces will participate in the election to assure a quorum in the New Parliament; nevertheless it is expected that a quorum will be present when the Parliament meets in August.
The old Parliament, however, still continues its existence in extraordinary session at Canton, to be sure, without a quorum, but living in the hope of gathering a quorum by the time of the presidential election. Some observers consider it possible that the old Parliament may elect General Feng Kuo-chang president. Others think that it may still more effectively try to embarrass the ultra-militarists by electing Hsü Shih-ch’ang. Thus far its intentions have, however, not crystallized. As noted above, General Ts’ao-k’un is a candidate for vice president, and in return for his support to the war policy will receive the votes of the militarist party.
Aside from the fact that groups exist around the Acting President, the Premier, and ex-Premier Hsü Shih-ch’ang, all the facts of the political situation are still in fluidity and new alignments may be formed at any time.
The political and military activities of the leaders of the Central Government and of the provincial tuchuns, described above, entailed a heavy expense, for which the normal revenues of the Government were not sufficient. Recourse was therefore taken to foreign loans, supplied by Japanese capitalists in return for valuable privileges.
Another extraordinary source of revenue was found in the transaction by which the Government purchased the opium stocks remaining in Shanghai from the opium combine there, with the purpose of [Page 105] reselling them to a native syndicate or establishing a government monopoly service, administered similarly to the salt gabelle. The plans on this point have not been completely worked out at this date. It is, however, feared that whatever plan may be adopted it would involve not only the selling of the stocks now on hand but the possibility of introducing almost unlimited additional supplies, with the result of undoing to a large extent the good work accomplished during the last ten years in the reform of the opium vice. The blame for this deplorable result must be shared in equal parts by the Shanghai opium combine and the officials of the Chinese Government who took part in this action. The declaration that the opium will be sold only for medicinal purposes is not reassuring public apprehensions.
Notwithstanding the deplorable conditions of civil strife and official corruption which unfortunately have to be recorded, there has nevertheless been done in this period a great deal of constructive work. A new activity is the building of public highways, which has been pursued with energy in the region of Peking. When the pneumonic plague made its appearance in the northern part of Shansi Province, it was indeed at first allowed to spread through the incompetence and ignorance of the immediate local officials. But the Central Government, with the generous personal assistance of foreign medical men, organized a very efficient antiplague service, through which the spread of the epidemic into the populous plains of the northern provinces was prevented. Governor Yen, of Shansi, is among the high officials who deserve credit for this achievement. Through all the political unrest the work and industry of the people goes on quietly and normally, except in the unfortunate regions upon which the military curse has directly descended. It is for this reason, and on account of the law-abiding temper of the vast masses of the population, that China has not been thrown into an entirely intolerable condition.
(2) Attitude toward the war
The Chinese Government continues its complete willingness to cooperate with its associates in the present war within the limits of its means and opportunities. Suggestions made by the Allied powers with respect to the surveillance of enemy subjects resident in China, and for their eventual internment or deportation should it be necessary, were readily accepted and acted upon by the Chinese Government. The preparations in connection with the Siberian situation will be referred to elsewhere. However, while the attitude of the Chinese Government is actively friendly, the people in the provinces have not been made to realize sufficiently what participation in the war means, nor indeed what are the issues in this great contest. It is a great task to familiarize so vast a population, unaccustomed to think about political and foreign affairs, with the issues and the progress of the war. The efforts which are being made to make the Chinese people realize its meaning to them and to the world at large will have to be considerably reinforced if they are to achieve their object. The Chinese people have never distinguished between western foreigners, and it is difficult for them to realize just what this [Page 106] war means. (An important Chinese public man, when questioned about this matter, recently stated: “There is one province in which the people pray for a German victory—that is Shantung.” The man had been governor of that province himself.)
B. Foreign
(1) Relations with foreign countries
The secret negotiations between the Japanese and Chinese Governments, following upon the exchange of notes in March, reported in my last quarterly report, resulted in the signing of two agreements relating to military and naval cooperation. The agreements were signed by the special delegates on May 16 and 17 respectively, and formal ratifications were exchanged on May 30. The two agreements are almost alike in substance, with differences only in the application to the department concerned. The substantive provisions of the agreement are as follows:
The extension of enemy influence to the East makes it necessary for China and Japan to take concerted action to guard against the common enemy; Chinese officials shall aid Japanese troops in the military areas while the latter shall respect the sovereignty of China and local customs; the Japanese troops shall be withdrawn from Chinese territory as soon as military operations cease; if troops are to be dispatched outside of Chinese territory the two countries shall act jointly; matters relating to the military operations shall be decided by the military authorities of the two countries jointly, in accordance with the military strength of each country; both countries shall appoint deputies to arrange details of military cooperation; they shall facilitate transportation by land and water; they shall arrange for military railways, telegraph, and telephone lines which will be dismantled at the conclusion of military operations; they shall furnish each other with necessary military supplies and materials of all kinds, and carry out sanitary measures jointly; one country may lend to the other military experts; the intelligence agencies of the two countries shall exchange information and there shall be common secret passwords; the original treaty regarding the Chinese Eastern Railway shall be respected; the time for commencing actual military operations shall be decided by the highest military organs of the two countries; this agreement shall become null and void as soon as military operations against the common enemy come to an end.
It was recognized that the character of this agreement would be determined entirely by the subsequent action urged under it, both with respect to military operations and the furnishing of supplies, as well as to matters relating to communication. The Chinese Government believed that the agreement met the situation which had arisen on the Siberian front and that it did not contain anything derogatory to Chinese sovereignty. Criticism directed against the agreement dwelt on the absolute secrecy of the negotiations, the exclusion of the other Allies from participation therein, and the possibility that under the agreement far-reaching claims for intervention in Chinese affairs and control of Chinese resources might subsequently be introduced.
The situation on the Siberian front continues to give great concern to the Chinese Government. While the original apprehension suggesting [Page 107] the possibility of a hostile movement controlled by Germany, to dominate Siberia and North Manchuria, was soon found to be exaggerated, still many troublesome questions arose with respect to the situation on the Chinese Eastern Railway and along the Chino-Siberian front. The embargo, which at the instance of some of the Allied powers had been placed on exports from China into Siberia, was in force at the beginning of the quarter. Shipments of food supplies had been permitted to certain regions where their proper disposal could be guaranteed. The Russian Minister considered that the danger of exportation of goods, particularly food supplies, from Siberia westward, so as to reach places under German control, was so slight that it need not weigh against the advantages of restoring normal conditions of supply and commerce in Siberia, which would greatly redound to the benefit of the Allies. The American Government took a similar view, specially with regard to foodstuffs. In the month of June the Chinese Government, acting upon its own motion, due to the representations made by Chinese merchants, as well as by Chinese residents in Siberia, removed the embargo. At this time, however, the railway transportation in Siberia was so disorganized that the measure did not have much practical effect. The export to Siberia of goods primarily useful in war would probably be protested against by several of the Allied Governments.
The Chinese Eastern Railway continued to be policed by Chinese troops. Its administration remained under the authorities which had originally, before the occurrence of the present troubles, been in charge under the Russo-Chinese treaty. The American Railway Commission to Russia, being entrusted with the function of general assistance to the Russian Railway System, was invited by General Horwath, the chief official of the Chinese Eastern Railway, to lend its aid in an advisory capacity on that line. A number of units of the commission were therefore placed along the railway in April.
When the forces of General Semenoff, operating between Manchuli and Kyranskaya, were forced to retreat in June, parts of them crossed into Chinese territory. The Chinese Government being desirous to avoid any act amounting to intervention in Russian internal affairs, such as the tolerance of the presence of armed troops of either party on Chinese territory, attempted to disarm the refugee force. While some were disarmed, others resisted. The matter has not been settled at this date. There are with the Semenoff forces a number of Japanese officers and some Chinese mercenary troops enlisted and hired by General Semenoff.
The financial destitution of the Central Government caused by the condition and methods described above led the officials of the Central Government, as well as of many provinces, to take recourse to foreign loans. During the quarter among the more important loans, all Japanese, there were a loan of twenty million yen, secured on the revenues of the Government telegraph system; a loan of three million yen marked for the construction of wireless stations; a loan of twenty million yen for additional construction on the Kirin-Changchun Railway; a loan of three million yen to Fengtien Province for the redemption of small coin notes, secured on collieries; a number of other loans were in the process of negotiation, secured [Page 108] on mining rights and Government revenues. The larger part of the proceeds of these loans, for whatever purpose avowedly constructed, were used to defray military operations, such as described above. The wholesale pledging of important national revenues and resources for such a purpose was bitterly condemned and resented by the Chinese people. The bearing of the liens and concessions granted in these loan contracts on the commercial rights and opportunities of other nations still remains to be seen.
(2) Attitude toward the United States and Americans
The customary friendly attitude toward America of the Chinese officials and people found an active expression when in the American Red Cross drive of May an invitation was extended to Chinese to become associate members of the American Red Cross. The response was spontaneous and enthusiastic. Local committees were formed by Chinese in Shanghai, Canton, Hankow and other important centers. As a result about thirty thousand Chinese associate members were added to the Red Cross and large contributions were made to the Red Cross funds by the President, Premier, Cabinet ministers, and several governors of provinces. The invitation was understood by the Chinese as an opportunity to show in a concrete form their desire to be personally of assistance in the war through associating themselves with an organization the constitution of which admitted foreign associated members.
The Chinese officials and people continue to be most anxious that Americans should interest themselves financially in China. The development of Chinese communication and resources has suffered a great deal through the temporary withdrawal of capital support from Europe. The delay in railway construction is felt particularly as an injury to commerce as well as to the political necessity of a more complete union of China. This union cannot become effective before the North and South, the East and West, are joined by railways, which are indeed already surveyed, the construction of which however has been prevented on account of the war. The Chinese believe that by devoting a relatively infinitesimal part of American capital strength to Chinese development at this time, results largely in excess of what could be expected in ordinary times would be obtained in improving conditions in China; the direct return to the investor would also be substantial. …
I have [etc.]