Papers Relating to the Foreign Relations of the United States, 1920, Volume I

693.00/3787

Quarterly Report of the Legation in China for the Period July 1–September 30, 1920⁴¹

undated

Political—Domestic

The events which led up to the most important political change in this quarter—the downfall of the Anfu clique in Peking—may be said to have had their actual beginning in the withdrawal of General Wu Pei Fu together with his Third Division from their station at Hengchow in Hunan to return to Chihli, their home station, the latter part of May. The motives leading to General Wu’s withdrawal to Chihli Province are many and complicated but a résumé of some of the more important will throw some light upon the general political situation, as well as upon the character of General Wu who has stood out in striking contrast to the majority of Chinese military officials. In the spring of 1918 General Wu, acting under orders from his superior Tsao Kun, Tuchun of Chihli Province, had gone to Hunan and recaptured Yochow and Changsha from the South and established himself in the province. Instead of receiving appointment as Tuchun of Hunan to which it would seem he was entitled, this position was given to General Chang Ching-yao, an adherent of Tuan Chi-jui, and a notoriously corrupt and vicious official, who had rendered no aid in recapturing Hunan for the North, and who administered his position in such a manner as to best enrich himself at the expense of the province, particularly the northern portion where he was established. General Wu had conducted himself in a way to gain the admiration of the natives in the southern portion of the province, where he was established and actually held Hunan against the South. For ten months prior to his withdrawal to Chihli, General Wu had received no funds from the Central Government for payment of his Third Division troops. The Anfu Club which controlled the administration of the central government in Peking was indulging in a saturnalia of corruption unequaled since the establishment of the Republic and perhaps seeing their star declining were engaged in a most energetic absorption of loans and government revenues, and no funds were available for any except their actual adherents of which Wu Pei-fu was not one. What funds were given by the central government for troops in Hunan were sent to the corrupt Anfu adherent, Chang Ching-yao. The latter also allowed no more of the provincial revenues to be utilized by General Wu than those received from the territory in which General Wu was actually in control. In the meantime a movement had arisen in Hunan directed against Chang Ching-yao and his regime of despoliation. The cry was “Hunan for the Hunanese”. General Tan Yen-kai, classed as an adherent of the South, was the military leader of the movement. General Wu, disgusted with the attitude of the central government and sympathizing with the desire of the natives of Hunan to rid themselves of Chang Ching-yao had secured the permission of his chief Tsao Kun to withdraw to Chihli, the ostensible reason at first given being the non-payment of the troops by the Central government. It is also asserted on good authority that General Wu had privately negotiated with General Tan Yen-kai, sympathized with his aims of driving out General Chang, and arrived at an understanding with the Southern general. It is stated that General Wu received $600,000 from the South for his withdrawal, and while this is undoubtedly true, his friends point out that it was disbursed to his troops whose pay was months in arrears, and [for] whom according to Chinese custom, the provincial revenues were looked [to] to provide a large share of payment.

On May 25 General Wu started the withdrawal of his troops from Hangchow, and distributed them at strategic points on the Peking-Hankow line, thus rendering impossible any probable aid reaching Chang Ching Yao from the North. Meantime General Wu openly announced his intention of checking and destroying the Anfu activities in Peking [and] in view of subsequent events it must be said in fairness to General Wu in this move he was actuated chiefly by patriotic motives and that the destruction of the Anfu party in Peking was the leading object of his withdrawal to Chihli. As had been expected, as soon as General Wu had retired from Hunan, Tuchun Chang was attacked from the south by General Tan Yen Kai. The troops of General Chang Ching-yao, a large portion of which existed only on paper for pay-roll purposes, rapidly gave way. By the middle of June Changsha had fallen to the Southern troops, Chang Ching-yao had withdrawn to Yochow, and a mandate was issued sternly ordering him to defend the province against the advances of the southern forces, and stripping him of his titles of Tuchun and Acting Civil Governor, but allowing him to remain in charge to direct the battle. It was on June 13th, 1920, during this occupation of Yochow by Chang Ching-yao, that Wm. A. Reimert, an American missionary of the Reformed Church Mission at Yochow, was shot down in cold blood on the mission premises, by an officer and squad of soldiers belonging to Chang Ching-yao’s forces. This occurred after repeated and unavailing requests for protection had been addressed to General Chang by the mission, Chang admitted his personal responsibility for the murder of Reimert, and personally paid a solatium of $45,000 to the family of the deceased, but up to the present has not been further punished, the Central Government holding that the Mandate of June 13th, 1920 stripping Chang of official rank is inclusive in its nature and a punishment for all his crimes as Tuchun of Hunan. This view is being strongly opposed by the Legation, which is pressing for adequate punishment of Chang Ching-yao.

By the end of June Yochow had fallen, and Chang Ching-yao’s troops had withdrawn and fled from Hunan, and the latter had fled to foreign concession in Hankow, though ordered to Peking by mandate for an accounting. Hunan was again in the hands of the South, or rather of the Hunanese.

By this time it was realized in Peking that the Anfuites must either submit to being curbed or come into conflict with Wu Pei-fu, who had established his headquarters at Paotingfu where he was conferring with his chief, Tsao Kun, whom he had apparently won over to his beliefs.

Near the end of June Chang Tso-lin, Governor General of Manchuria, had come to Peking with a bodyguard of troops, to act as mediator between the Anfu group and the Chihli party. He conferred with the President, Tuan Chi-jui and “Little” Hsu (General Hsu Shu-cheng, the powerful leader of the Anfu clique), and then went to Paotingfu for a conference with Tsao Kun and Wu Pei-fu, where he apparently entered into an agreement to support them in the event of an open conflict with the Anfu group, led by Tuan Chi-jui and “Little” Hsu. On his return to Peking he again conferred with the President and Tuan, presenting the demands of the Chihli Party for the removal of “Little” Hsu and the reorganization of the government, consisting of the elimination of the Anfu members of the cabinet, and the dismissal of both Parliaments (northern and southern) and the settlement of the parliamentary question as well as of unification and other national questions by a popular convention. On July 4 a presidential mandate was issued relieving General Hsu Shu-cheng of his post as Commissioner for Frontier Development in the Northwestern Regions (Mongolia), as well as abolishing the post of commandant of the Frontier Defense Force, removing the latter from Tuan’s control and placing it under the direct authority of the Ministry of War. For the moment it looked as if the Anfu Club were routed, and that in the new cabinet, whose organization was mooted, it would strive to retain only the most lucrative posts of Minister of Communications and Minister of Finance for its members, in order to insure to itself adequate revenues. However, it was reported that Tuan was insisting that Wu Pei-fu should be punished for his interference in politics, and it was not to be expected that the astute, ambitious and courageous “Little” Hsu, than whom no man was more feared in Peking, would calmly submit to being stripped of his power, although he had been given the honorary rank of Generalissimo, or Marshal, which carried no office but a salary.

Finding Tuan in no mood for compromise, Chang Tso-lin, left Peking in the direction of Mukden, it being understood that he had ordered two of his divisions from Mukden and Fengtien to entrain for Shanhaikwan. Tuan Chi-jui was concentrating his troops at Nanyuan near Peking, and trying to induce the President to dismiss Wu Pei-fu. Then troops were thrown about the President’s palace to “protect” him and, acting under coercion from Tuan and “Little” Hsu, the President placed his seal on a mandate on July 9th cashiering General Wu Pei-fu, stripping him of his offices and decorations and also depriving General Tsao Kun of his rank but allowing him to retain his office and command. From that time until the routing of the Anfu forces the President remained a prisoner in his palace, subject to the demands of Tuan and “Little” Hsu. On July 8th, the Diplomatic Corps handed a note to the Chinese Government⁴² expressing their confidence in the President and trusting in him to protect foreigners and their property and deprecating fighting in Peking or the bombing of the city by aeroplane, which had been threatened by the Anfuites. Both sides began threatening movements of troops—Tuan and “Little” Hsu toward Paotingfu and Wu Pei-fu and Tsao Kun toward Peking. Chang Tso-lin had moved some of his troops within the wall at Shanhaikwan, and was threatening Tuan with “armed” mediation if he did not come to terms, but until the last moment it remained doubtful if Chang would remain neutral or would really throw his troops into armed conflict on the side of Tsao Kun and Wu Pei-fu. It may be seriously questioned if Chang Tso-lin was actuated in his final decision by any high patriotic motives, but rather it was to his own personal advantage and ambition to join the Chihli party. In the first place he was fighting on the side enjoying popular approval because of its avowed intention of removing the Anfu power, with its pro-Japanese activities, from Peking; but his real motive no doubt was that by joining the Chihli party it offered an opportunity to eliminate from power his envied and feared rival “Little” Hsu, and to add the latter’s sphere of influence Mongolia to his own extensive Manchurian kingdom, as a field for the development and increase of power.

On July 12th Tsao Kun, Military Governor of Chihli, Chang Tsolin, High Military Commissioner of the Three Eastern Provinces of Fengtien, Wang Chan-yuan, Military Governor of Hupeh, Li Shun, Military Governor of Kiangsu, Ch’en Kuang-yuan, Military Governor of Kiangsi, Chao T’i, Military Governor of Honan, Tsai Cheng-hsun, Tartar General of Suiyuan, Ma Fu-hsiang, Defence Commissioner of Ninghsia, Kansu, issued a public statement denouncing “Little” Hsu, Tuan Chi-jui, the Anfu party and parliament, and declaring their intention of upholding the President to exterminate the traitors and strengthen the country, and appealing for public support of the above officials. Only Chang Tso-lin, and Tsao Kun actually furnished troops for the fighting, and General Wu Pei-fu, being a subordinate of Tsao Kun was not mentioned, but to him must be given the credit of having the initiative and the courage of his convictions to throw down the gauntlet to forces superior to his own and to be ready to actually fight for his conviction of what was right. … As it was, attempts were made at compromise and mediation, but Tsao Kun and Wu Pei-fu remained firm and prepared to contest the troops of the Anfuites. Public opinion as expressed by native commercial and educational bodies was opposed to armed conflict, but after the fight started public sympathy was within Wu Pei-fu and his adherents.

A mandate forbidding hostilities issued on July 14th was followed by the proclamation of martial law in Peking, the seizure of the telegraph offices in the city by the Anfuites, the closing of hostile newspapers, and the establishment of a strict censorship favorably inclined toward Anfu. Marshal Tuan issued [a] manifesto putting a price on [the] heads of Tsao Kun and Wu Pei-fu. Railway communication was cut and Peking was isolated. Meantime desultory encounters between the troops of Marshal Tuan and “Little” Hsu and those of Tsao Kun and General Wu were occurring in the vicinity of Chochow and Paotingfu, with at first gains reported for the Anfuites, but it soon became apparent that the troops of General Wu though less well equipped than those of the opposition, who possessed liberal quantities of arms and ammunitions, some of Japanese and Italian origin, had greater efficiency in action and morale and in addition more aggressive leadership. Under Tuan were the two mixed brigades of the Frontier Defense Force, totalling about 30,000 and in addition the 9th, 13th and 15th divisions, the loyalty of the latter being doubtful. Under Wu Pei-fu were his Third Division and two brigades brought from Hunan, and Tsao Kun had two brigades in and around Paotingfu. Tuan had moved his 13th and 15th divisions toward Chochow, about 50 miles south of Peking, where a portion of them came into conflict with the troops of General Wu.

Inspired reports of overwhelming victory for the Anfu forces were circulated in Peking, and a mandate was issued by the President ordering the troops to cease fighting and withdraw to their former stations. At first this was interpreted as a move to allow the Chihli party gracefully to withdraw without loss of face after their defeat, but the real news soon leaked through that Tuan’s forces had been outmaneuvered and defeated by General Wu, and the mandate then appeared in the light of a cover for Tuan to retire. Toward the east the mixed Brigades of the Frontier Defence Force had been employed, and had gained a small victory by capturing Yangtsun from an inferior Chihli force, but with the advent of Chang Tsolin’s two divisions from the north, well-equipped with Japanese arms and munitions, the Anfu forces after several skirmishes began to withdraw and desert, fleeing toward Peking.

During this encounter on the Peking-Mukden Railway, train service between Peking and Tientsin had been interrupted by the military, but was re-established by an allied military expedition from Tientsin, who repaired the torn track, and the opposing parties promised to abide by the provisions of the Boxer protocol and to refrain from interrupting rail communication between Peking and Tientsin.

Lacking effective leadership in the field, with a broken-down commissariat, and with little stomach for fighting for their pro-Japanese superiors, the Anfu troops were rapidly withdrawn toward Peking; the city gates were closed to prevent their entry, and there was a cessation of actual fighting. The troops of Chang Tso-lin and Wu Pei-fu moved forward to encircle Peking, to disband the enemy, and to await for negotiations with the vanquished Tuan, and his party. There was a disposition on the Chihli side not to exact any penalty from Tuan who was looked upon as the venerable old man and teacher of most of the Chihli generals, and the blame for the Anfu activities was placed largely upon his subordinates, particularly “Little” Hsu.

On July 27th a mandate was issued cancelling the order to degrade and punish Generals Tsao Kun and Wu Pei-fu, owing to “extenuating circumstances” conflicting with the previous mandate. On the 28th followed three mandates—one accepting the resignation of Tuan Chi-jui, another placing all the troops of the Frontier Defence Force under the control of the Ministry of War, and a third instructing the Ministry of War immediately to disband the Frontier Defense Force, including General Hsu Shu-Cheng’s four brigades of Northwest Frontier (Mongolia) Defence troops. It was known that a fourth mandate had been prepared ordering the arrest of the leaders of the Anfu group, but this had been anticipated by these leaders who were now engaged in a mad scramble seeking the safety of the hotels, homes and Legations of the Legation quarter, the Anfu members of the cabinet having despatched their resignations. The Diplomatic Body had met on the 28th to consider the right of asylum in the Legation quarter, at which the British, French and American Minister[s] announced their intention of notifying their nations not to harbor Chinese fugitives, but in this the Japanese Minister refused to concur.

The issue of the mandate for the arrest of ten of the Anfu leaders the seizure of the Anfu Club, the search of members’ houses, and the closing of their propaganda organs, marked the final downfall of this pro-Japanese clique, who during their regime had borrowed between Y. 300,000,000 and $400,000,000 bartering many available resources or sovereign rights of the country. Some of this money was spent in furthering the private aims of the Anfuites and their masters, but large quantities adhered to the fingers of the various members of the Anfu Club. …

It is an interesting commentary on the workings of the central government that after the downfall of the Anfu Club the Waichiaopu issued a public statement washing its hands of any loans made during the past few years, asserting that most of those concluded had been negotiated and signed without its knowledge and approval.

Although the troops of Li Shun, Tuchun of Kiangsu, took no active part in the conflict between the Anfu-Chihli parties, and his soldiers were not sent out of the province, the important part that he played in this conflict must be mentioned. Animated by a desire to destroy the “traitors” at Peking and to attain a real unification of the country followed by the establishment of a stable central government, his representatives from the first had been in touch with Generals Tsao Kun and Wu Pei-fu. Occupying as he did a strategic position in the Yangtze Valley and having at his command seasoned and loyal troops, he was able to preserve peace in the entire Valley and prevent any assistance being rendered to the Anfuites from Central or South China, Anhui Province, whose Tuchun Ni Ssu-chung had left the province just before the Anfu-Chihli embroglio to recuperate at Pehtaiho and Tientsin from illness, was a stronghold of Anfuism, many of the members of the Anfu Club coming from Anhui. Military headquarters for Anhui had been established at Pengpu, a strategic point on the Tientsin-Pukow Railway line, and from there it would have been possible to despatch troops to attack Wu Pei-fu in the rear, but as the troops of Li Shun commanded a portion of the line above Pengpu (Anhui) and his attitude was well known no attempt was made to render aid to Anfu from this quarter. Li Shun was also in a position to attack Shantung from the rear if any serious attempt should have been made by Ma Liang (Defense Commissioner in Shantung and pro-Anfu) to render aid to his group. To the south was Chekiang, in which Lu Yung-hsiang a Tuan-Chi-jui adherent, was Tuchun.

It is not believed that he had any serious intention of aiding the Anfu group in the conflict, but Ho Feng-lin, who was Defense Commissioner of Shanghai and in charge of the Arsenal there had just before the conflict been transferred by mandate from the authority of General Lu of Chekiang under the direct authority of Li Shun, by which the latter hoped to gain control of the Arsenal. This was resented by Ho Feng-lin, as well as General Lu, and at the beginning of the trouble in the North, both sides advanced troops along the Shanghai-Nanking Railway, cutting the line and holding up traffic, and for a few days it looked as though a conflict would result, but as the movements of troops seem to have been ordered by subordinates without the direct knowledge of either General, and as neither had inclination or any good reason for fighting, the troops along the railway were withdrawn by mutual agreement.

Li Shun had also obtained evidence that Wang I-tang the Northern Peace Delegate at Shanghai and an Anfu appointee, was sending agents provocateurs into the province to stir up trouble, and issued an order for his arrest. Wang denied the charge but with the downfall of Anfu his name was among the supplementary “traitors” ordered to be arrested by Presidential mandate, and he fled to Japan, leaving the North without a peace delegate for the time being.

The Peking Government having been purged of the Anfu clique it remained to be seen what sort of a settlement would be made by the victorious generals who were in a position to dictate terms, and to see what attitude would be adopted toward the popular program which General Wu Pei-fu had championed, viz., the calling of a representative citizens’ convention to solve such problems as the drafting of a Constitution, the organization of a new parliament, together with the unification of the North and South, abrogation of the Sino-Japanese Military Pact, and the disbandment of troops. It soon became apparent that Chang Tso-lin intended to claim chief credit for the victory and to impose such a settlement as would meet with his wishes without regard for those of General Wu. In a statement to foreign correspondents on July 26th at his headquarters he stated when asked his opinion of General Wu:

“I deal with Tsao Kun only. General Wu is only chief of a division. Men of that rank can hardly deal in politics, for there are many divisional commanders in the land.”

A Presidential Mandate appeared appointing the new acting cabinet composed as follows: Chin Yun-peng as Premier and Minister of War; Chang Chih-tan, Interior; Wang Nai-pin, Agriculture, Admiral Sah, Navy (non-party); W. W. Yen, Foreign Office (nonparty); Tung Keng, Justice, Fan Yuan-lien, Education (said to be Chinputang); Chow Tze-chi, Finance; Yeh Kung-cho, Communications (Chiaotung). The most important portfolios, War, Interior, Finance and Communications were regarded as going to men who were the choice of Chang Tso-lin, and the Premier was known to be a close friend and adherent. For this cabinet it may be said that in ability it surpassed any since the establishment of the Republic and for this reason much was [has] been expected from it in different quarters; but it must be pointed out that however able may be the men composing it, its existence is largely dependent upon the will of the two powerful militarists of the north, Chang Tso-lin, and Tsao Kun; the central government has no troops under its direct authority and so must depend in the last resort upon the will and wishes of those able and willing to underwrite the Central government. The government was in urgent need of funds for administrative purposes, while on the other hand the militarists showed no disposition to disband troops but called instead for increasing amounts of money for military purposes. Therefore, it was not to be expected that much positive progress in reform of administration, or in settling the internal troubles of China would [be] made by the present cabinet. Furthermore, its members were only acting and could be considered to lack any legal basis for holding their portfolios, inasmuch as the northern parliament, which was largely composed of Anfu adherents, was dispersed at the fall of the Anfu clique, and no quorum was available at least to give the form of legality to the cabinet by approval of its appointment by presidential mandate.

Although a People’s Convention or Assembly was one of the chief points in General Wu Pei-fu’s program, and was favorably discussed throughout the country by native educational and commercial bodies as well as being recommended by Dr. Reinsch in a memorandum to the central government it received little consideration at the hands of Chang Tso-lin or the Peking government. The matter was referred for consideration to the Ministry of the Interior where as far as can be ascertained at the end of the quarter it was still being “considered”. No doubt the central government felt that the calling of such an Assembly, unless the election of representatives were properly manipulated, would finally call into doubt the legal basis of its own existence. The President was elected by the Parliament called after Tuan Chi-jui came into power, the legality of which would no doubt be questioned by a popular or representative assembly, and thus the legality of the office of the President appointed by this “illegal” parliament. To call for the election of a new parliament under the old election law would have been tacitly to admit that the Tuan parliament was illegal. The government therefore found itself in a quandary as far as any legal or constitutional basis was concerned and adopted a dilatory attitude on the settlement of such questions. Popular opinion on the other hand was convinced that any election arranged for by the present government would only result in an assembly of persons representing the various tuchuns and would consequently not be expected to accomplish more than was already being done by these authorities toward the solution of internal problems.

In the settlement at Peking, after the July conflict it soon became apparent that Chang Tso-lin was to dictate the terms as far as possible, though naturally Tsao Kun’s wishes had to be deferred to. The settlement became a rivalry between these two military chiefs to strengthen their own personal power rather than to establish a strong stable central government. Chang Tso-lin seized most of the surplus military supplies, aeroplanes, and other military equipment and transported them to Manchuria. Both he and Tsao Kun recruited soldiers from the defeated Anfu troops and Chang Tso-lin stationed some of his own troops near Peking, in order to “protect” the President and the Peking government. In order to be on a parity with Chang Tso-lin, Tsao Kun was given appointment as Inspector General of Chihli, Shantung and Honan. Li Shun, who had wanted the Inspectorate General of Kiangsu, Kiangsi, and Anhui, was instead given the meaningless appointment of Inspector General of the Yangtze, which he refused. He was also urged to become Chief Peace Delegate for the North, but this he also declined at first, though it was known that he was unofficially negotiating between the North and South as to unification terms. It was known that he was greatly disappointed over the outcome of the routing of the Anfu clique, which he had hoped to see followed by measures looking toward the establishment of a more representative and stable government in Peking, but which instead was followed by the substitution of the power of Chang Tso-lin and Tsao Kun, for that of Tuan Chi-jui and “Little” Hsu, and by the practical ignoring of the liberal views of Wu Pei-fu and himself (Li Shun).

In the settlement Wu Pei-fu was appointed deputy Inspector General of Chihli, Shantung and Honan under Tsao Kun, and it was believed that he would have charge of the greater portion of his superior’s troops. It must be pointed out that Wu Pei-fu was lacking a Tuchunship from which he could obtain provincial revenues for his troops and for increasing his power and must depend upon his superior, Tsao Kun, for this. It is claimed for General Wu that he is a poor man after years in government service, which is in itself exceptional in China, that he is a strict disciplinarian, a man of few words, modest, and with no claim to being a politician. It is believed that he is actuated by truly patriotic motives, and in popular opinion he is looked upon as the Hero of China. It was thought that he would undoubtedly devote himself to the strengthening of his position and the increase of his army, for it was apparent that he and Chang Tso-lin held opposing views which might some day result in a clash. General Wu, however, realized that any attempt at present to try conclusions with Chang Tso-lin would only prove abortive, the latter having at his command some 200,000 troops, well armed and equipped, and the three rich Manchurian provinces from which to draw revenues.

During the struggle in the North events were far from peaceful in the South. The Yunnan-Kweichow offensive instituted by Tang Chi-yao (Military Governor of Yunnan) in May against Szechuan finally resulted in the defeat of the Szechuan Tuchun Hsiung K’o-wu, largely because of disloyalty in his own ranks. Although Tang Chiyao by no means gained control of the entire province and his position there remained to be consolidated and strengthened, it represented an additional gain to his already large sphere of influence in the south. During this time Tang aligned himself with the former directors of the Canton Military Government, Tang Shao-yi, Sun Yat-sen and Wu Ting-fang (in Shanghai) and announced his adherence to the constitutional cause, and invited the old Parliament to come to Yunnan, and later to Chungking.

Another movement was that of General Chen Chiung-ming, commander of the southern (Kwangtung) forces stationed in Fukien, directed against the Tuchun of Kwangtung, Mo Yung-hsing, a lieutenant of General Lu Yung-ting of Kwangsi, whose subordinates were in control of Kwangtung province. On August 20th Swatow had fallen to the forces of General Chen, and his forces were advancing on Waichow, near Canton. His avowed purpose was to capture Canton and relieve his native province of the burden of the Kwangsi militarists, who with the aid of Tsen Chun-hsuan and Wen Tsung-yao were still maintaining the skeleton of the old Canton Military Government, and wielding their power chiefly for their own benefit. Toward the end of the quarter it looked as though General Chen would meet with success, in driving out the Kwangsi militarists from Kwangtung.

During this period the Central Government adopted a two-fold policy toward the question of internal peace. Measures were taken to treat directly with the military powers in control in the various provinces, meanwhile attempting to deal also with the south, using Li Shun, Tuchun of Kiangsu as intermediary, the latter finally assuming the office of Chief Peace Delegate for the North, and sending delegates to treat with Tang Chi-yao and other southern leaders. So far little progress toward any real understanding had been made. It was known that Sun Yat-sen was asking [aiding] General Chen in his efforts against the Kwangsi militarists in Kwangtung and if the latter’s efforts should prove successful the re-establishment of the Constitutional Party at Canton under the leadership of Sun Yat-sen, whose influence in the south is considerable, might be expected. Tang Chi-yao insisted upon his position being recognized in the southwest as co-equal with that of Chang Tso-lin and Tsao Kun in the north, and consequently would demand some voice in the Peking government under any plan of unification. Also if disbandment of troops was to take place, the southern military leaders, jealous of the increasing power of their northern rivals insisted that for each division disbanded in the south, one must also be disbanded in the north. It was doubtful if Chang Tso-lin and Tsao Kun had any idea of disbanding any of their troops, and the possibility of any agreement between the north and south seemed far distant, and little could be expected from the militarists in the final solution of China’s problems. Rather would it come from the people themselves.

In general it may be said that Competent observers who have traveled about the provinces in the past few years state that the people are going ahead making progress, and getting very definite ideas as to what they want. They want to see the country united, having little interest in the rivalry between the northern and southern militarists. They are becoming weary of the reign of the Tuchuns and want to see them abolished, and the people of each province are becoming daily more insistent upon the running of their own affairs within the province without interference from outside sources. They are adopting such slogans as “Hunan for the Hunanese” and “Home Rule for the provinces.” Recently the gentry and citizens of Kiangsu and Hupeh province[s] have opposed the appointees of the central government to the Civil Governorships of those provinces, insisting upon their own candidates, some demanding that they be elected by the province and have met with some success in their opposition. This movement is spreading throughout central and southern China, and is making some headway in the north. It is the opinion of some well-informed persons that within the course of two years China will experience a real revolution which will rid her of the military, and the form of government then sought will be a federation of States or provinces.

Political—Foreign Relations

On August 9th the Japanese Minister handed a note to the Chinese Foreign Office announcing what had already been suspected for some time, that the Anfu leaders had been given refuge in the Japanese Legation; the following men were named as being in the Japanese Legation Guard compound: Hsu Shu-cheng (Little Hsu), Tseng Yu-chun (ex-Minister of Communications), Tuan Chih-kuei (Commander Peking garrison), Ting Shi-yuan (Director Kin-Han-Suiyuan Railways), Chu Shen (ex-Minister of Justice) Wang Chilung (Financial agent of the Anfu Club) Liang Hung-chih (Chief Secretary of the Senate); Yao Tseng [Yao Chen?] (Chief Justice); and Yao Kuo-chen (Vice-Minister of Communications). Li Ssu-hao (ex-Minister of Finance) is also said to be in hiding in the Legation Quarter. After the downfall of the Anfu Club Peking had been placarded with photographs of these “traitors” and large rewards offered for their capture. The entrances to the Legation Quarter were guarded by Metropolitan police to prevent the escape of these men. However, it was an open question whether their capture was sincerely desired by the President or the Premier. But the notice from the Japanese minister that these men had been given an asylum in his Legation gave the opportunity for a protest from the Foreign Office and the request for the handing over of these men to be tried on civil and criminal charges, which was of course refused by the Japanese Minister. His action was the subject of criticism in the foreign and native press and of protests from native commercial and educational organizations. The action of the Christian Chinese in refusing to send delegates to the World Sunday School Convention in Tokyo may be taken as an indication of the popular feeling against Japan.

The arrest in August of George Shaw, a British merchant in Antung, by the Japanese authorities while he was in Korea and his detention without trial because of alleged conspiracy with the Koreans on Chinese soil also created a wave of resentment throughout China among all foreigners and was! the subject of protest from British Chambers of Commerce, who believed that the motive of arrest was to destroy the profitable trade in which Mr. Shaw was engaged in Antung, of which the Japanese were envious. It has been looked upon as another incident showing the real attitude of Japan toward the “Open Door” in China, especially in Manchuria.

The last of August the mission from the Verkhne Udinsk government, headed by M. Yourin, arrived in Peking to enter into unofficial negotiations with the Chinese government relative to the resumption of commercial relations between China and that part of Russia represented by the Far Eastern Republic with headquarters at Verkhne Udinsk. This delegation had been held up at Kiakhta, its entry into China having been protested by the French and Japanese Ministers. Then intervened the conflict between the Anfu and Chihli factions; but after the formation of the new cabinet it was decided to allow the delegation to proceed to Peking but not to receive them formally. Delegates were appointed by the Foreign Office to treat with M. Yourin informally.

The last of September a mandate was issued cancelling the recognition of the Russian Legation and consulates in China, the officials in charge being appointees of the old regime in Russia. Official denial was made that this withdrawal of recognition was in any way connected with the mission of M. Yourin. The Bureaus of Foreign Affairs in the various cities were ordered to take over and administer the Russian concessions. This action brought a protest from the Legations, as well as from the foreign communities in China, involving as it did questions of extraterritoriality and the regulation by Chinese authorities of foreign interests in the Russian concessions. The Foreign Office issued a statement shortly after the mandate explaining that the Russian concessions would merely be taken under trust by the Chinese government and would be returned to a future Russian government when recognized by China and that the rights of the Russian citizens in China would be safeguarded. At the end of the quarter this matter was still in nebulous state being the subject of discussion between the Legations and Consulates and the Chinese Government. It had been admitted informally by some Chinese officials that this move was a mistake, or at least that it was premature as no adequate machinery was available for taking over and administering the Russian concessions, or for looking after the judicial rights of Russians before the promulgation of the mandate, and therefore its issuance might result in difficulties rendering modifications necessary in carrying out the mandate. However, the Chinese Government may well have realized the possibility of these difficulties, but wished to face the foreign powers with a fait accompli.

Financial—The Consortium

After the organization of the new cabinet the attitude of the Consortium towards making loans was again discussed. The new cabinet found that large sums had been misappropriated by the Anfu club from the revenues of the Ministries of Finance and Communications, and then were also faced with the usual monthly excess of administrative expenses over revenues. Various plans for disbandment of troops and the reorganization of departments were brought forward as well as measures for increasing revenue, but at the end of the quarter no real improvement was to be noted. Mr. Lamont’s open letter to various publications in China correcting the misapprehension arising from the propaganda of misinformation regarding the aims of the Consortium and the reservations conceded to Japan in Manchuria and Inner Mongolia were given wide publicity. The announcement of the appointment of Mr. Frederick W. Stevens as the representative in Peking of the American Group was also received. The liberal elements among the Chinese continued to oppose any loan to the present central government, believing that it would only prolong Chinese internal ills. On the other hand it was argued by the Chinese that if supervision of expenditure of loans and of the revenues furnishing the security for loans was to be carried out so as to insure that the money would be spent for non-political purposes, it would amount to international control of China’s finances and consequently of China herself, to which they were naturally strongly opposed. Other Chinese deprecated our association with England, France and Japan in this undertaking, pointing out that the policy of these three countries was not in accord with ours; they pointed to the attempts of England to make Tibet a dependency, to the expenditure by British interests of some three and a half million dollars in Szechwan, ostensibly for the development of oil fields but chiefly for political purposes, to the attempts of France to increase her sphere in Yunnan and Kwangsi, and the Japanese in Manchuria, Shantung and Fukien. They argued that they did not doubt the good will and intentions of the United States but that the practical operation of the Consortium would either be rendered impossible by our associates, or that if it did come into operation it would not be along the lines laid down by the United States. They pointed to instances in the past where our announced intentions and policies in the East had been rendered nugatory by other powers with only a formal protest from the United States, which the Chinese did not feel to be of much value as opposed to the aggressive policy of the other powers. They stated that if a loan was to be made, they would prefer to have America make it alone. They believed that if the United States adhered to the announced aims of the Consortium, the final result will be that America and American interests would be excluded from participation in large undertakings in China, but that the reverse would be true so far as the other powers were concerned.

The meeting of the Consortium Groups in New York in October would undoubtedly be watched with keen interest by the Chinese government and people, and it was thought no doubt the Consortium would be approached by representatives of the Chinese Government for a loan, as the central government was hard pressed for funds.

On September 15th the Cabinet announced the flotation by the Ministry of Finance of the Ninth Year short term domestic loan, amounting to $60,000,000, of which $36,000,000 was to be used to buy back the depreciated Peking notes of the Bank of China and the Bank of Communications during the period of November 1, 1920 to January 31, 1921. The balance was to be used to discharge mortgages held by these two banks. Interest on the bonds was at 6%; the depreciated notes of the two banks mentioned to be accepted at par value in the purchase of bonds. These notes now sell for about 63¢ on the dollar. The bonds are secured on the Customs Surplus. After their withdrawal the depreciated notes are to be destroyed. It is hoped that this operation will re-establish the credit of these two government banks.

On August 5th an unofficial party of Congressmen, and their wives, daughters and mothers accompanied by Dr. Reinsch and Mr. Arnold, Commercial Attaché to the Legation, arrived at Shanghai, where they were lavishly entertained both by Chinese and foreign officials and organizations. From Shanghai the party went to Hangchow, thence to Nanking, Tsinanfu, Peking, Tientsin and Mukden, being extended every possible courtesy by the Chinese provincial and government officials, as well as by the Chinese citizens and the American officials and residents in China. It is hoped that the trip will result in a better understanding of the needs of American business interests in China, as well as the strengthening of our friendly relations with China and the Chinese.

Toward the end of September reports were received of the prevalence of a wide-spread famine area throughout the provinces of Chihli, Honan, Shantung and Shansi, estimated as affecting some twenty millions of people, and assuming the proportions of a national calamity. Steps were taken by the various Legations and foreign communities to organize International Relief Committees to work in cooperation with the Chinese in mitigating the famine.

41. Enclosure to despatch no. 778, Jan. 26, 1921, from the Minister in China; received Mar. 9, 1921.
42. Ante, p. 456.