China, Japan and the U.S.A. / Present-Day Conditions in the Far East and Their Bearing on the Washington Conference

by John Dewey

But there are specific elements in the situation which give grounds for apprehension as to the future. These specific elements are capable of detection and analysis. An adequate realization of their nature will be a large factor in preventing cynical apprehensions from becoming actual. This chapter is an attempt at a preliminary listing, inadequate, of course, as any preliminary examination must be. While an a priori argument based on a fatalistic formula as to how a “capitalistic nation” must conduct itself does not appeal to me, there are nevertheless concrete facts which are suggested by that formula. Part of our comparatively better course in China in the past is due to the fact that we have not had the continuous and close alliance between the State Department and big banking interests which is found in the case of foreign powers. No honest well-informed history of developments in China could be written in which the Russian Asiatic Bank, the Foreign Bank of Belgium, the French Indo-China Bank and Banque Industrielle, the Yokohama Specie Bank, the Hongkong-Shanghai Bank, etc., did not figure prominently. These banks work in the closest harmony, not only with railway and construction syndicates and big manufacturing interests at home, but also with their respective foreign offices. It is hardly too much to say that legations and banks have been in most important matters the right and left hands of the same body. American business interests have complained an the past that the American government does not give to American traders abroad the same support that the nationals of other states receive. In the past these complaints have centred largely about actual wrongs suffered or believed to have been suffered by American business undertakings carried on in a foreign country. With the present expansion of capital and of commerce, the same complaints and demands are going to be made not with reference to grievances suffered, but with reference to furthering, to pushing American commercial interests in connection with large banking groups. It would take a credulous person to deny the influence of big business in domestic politics. As we become more interested in commerce and banking enterprises what assurance have we that the alliance will not be transferred to international politics?

It should be noted that the policy of the open door as affirmed by the great powers—and as frequently violated by them—even if it be henceforth observed in good faith, does not adequately protect us from this danger. The open door policy is not primarily a policy about China herself but rather about the policies of foreign powers toward one another with respect to China. It demands equality of economic opportunity for different nations. Were it enforced, it would prevent the granting of monopolies to any one nation: there is nothing in it to render impossible a conjoint exploitation of China by foreign powers, an organized monopoly in which each nation has its due share with respect to others. Such an organization might conceivably reduce friction among the great powers, and thereby reduce the danger of future wars—as long as China herself is impotent to go to war. The agreement might conceivably for a considerable time be of benefit to China herself. But it is clear that for the United States to become a partner in any such arrangement would involve a reversal of our historic policy in the Far East. It might be technically consistent with the open door policy, but it would be a violation of the larger sense in which the American people has understood and praised that ideal. He is blind who does not see that there are forces making for such a reversal. And since we are all more or less blind, an opening of our eyes to the danger is one of the conditions of its not being realized.

One of the forces which is operative is indicated by the phrase that an international agreement on an economic and financial basis might be of value to China herself. The mere suggestion that such a thing is possible is abhorrent to many, especially to radicals. There seems to be something sinister in it. So it is worth explaining how and why it might be so. In the first place, it would obviously terminate the particularistic grabbing for “leased” territory, concessions and spheres of influence which has so damaged China. At the present time, the point of this remark lies in its implied reference to Japan, as at one time it might have applied to Russia. Fear of Japan’s aims in China is not confined to China; the fear is widespread. An international economic arrangement may therefore be plausibly presented as the easiest and most direct method of relieving China of the Japanese menace. For Japan to stay out would be to give herself away; if she came in, it would subject Japanese activities to constant scrutiny and control. There is no doubt that part of the fear of Japan regarding the Pacific Conference is due to a belief that some such arrangement is contemplated. The case is easily capable of such presentation as to make it appeal to Americans who are really friendly to China and who haven’t the remotest interest in her economic exploitation.

The arrangement would, for example, automatically eliminate the Lansing-Ishii agreement with its embarrassing ambiguous recognition of Japan’s special interests in China.

The other factor is domestic. The distraction and civil wars of China are commonplaces. So is the power exercised by the military governors and generals. The greater one’s knowledge, the more one perceives how intimately the former evil is dependent upon the latter. The financial plight of the Chinese government, its continual foreign borrowings which threaten bankruptcy in the near future, depend upon militaristic domination and wild expenditure for unproductive purposes and squeeze. Without this expense, China would have no great difficulty henceforth in maintaining a balance in her budget. The retardation of public education whose advancement—especially in elementary schools—is China’s greatest single need is due to the same cause. So is the growth in official corruption which is rapidly extending into business and private life.

In fact, every one of the obstacles to the progress of China is connected with the rule of military factions and their struggles with one another for complete mastery. An economic international agreement among the great powers can be made which would surely reduce and possibly eliminate the greatest evils of “militarism.” Many liberal Chinese say in private that they would be willing to have a temporary international receivership for government finance, provided they could be assured of its nature and the exact date and conditions of its termination—a proviso which they are sensible enough to recognize would be extremely difficult of attainment. American leadership in forming and executing any such scheme would, they feel, afford the best reassurance as to its nature and terms. Under such circumstances a plausible case can be made out for proposals which, under the guise of traditional American friendship for China, would in fact commit us to a reversal of our historic policy.

There are radicals abroad and at home who think that our entrance into a Consortium already proves that we have entered upon the road of reversal and who naturally see in the Pacific Conference the next logical step. I have previously stated my own belief that our State Department proposed the Consortium primarily for political ends, as a means of checking the policy pursued by Japan of making unproductive loans to China in return for which she was getting an immediate grip on China’s natural resources and preparing the way for direct administrative and financial control when the day of reckoning and foreclosure should finally come. I also said that the Consortium was between two stools, the financial and the political and that up to the present its chief value had been negative and preventive, and that jealousy or lack of interest by Japan and Great Britain in any constructive policy on the part of the Consortium was likely to maintain the same condition. I have seen no reason thus far to change my mind on this point, nor in regard to the further belief that probably the interests of China in the end will be best served by the continuation of this deterrent function. But the question is bound to arise: why continue the Consortium if it isn’t doing anything? The pressure of foreign powers interested in the exploitation of China and of impatient American economic interests may combine to put an end to the present rather otiose existence led by the Consortium. The two stools between which the past action of the American government has managed to swing the Consortium may be united to form a single solid bench.

At the risk of being charged with credulous gullibility, or something worse, I add that up to the present time the American phase of the Consortium hasn’t shown perceptible signs of becoming a club exercised by American finance over China’s economic integrity and independence. I believe the repeated statements of the American representative that he himself and the interests he represents would be glad if China proved her ability to finance her own public utilities without resorting to foreign loans. This belief is confirmed by the first public utterance of the new American minister to China who in his reference to the Consortium laid emphasis upon its deterrent function and upon the stimulation it has given to Chinese bankers to finance public utilities. And it is the merest justice to Mr. Stevens, the American representative, to say that he represents the conservative investment type of banker, not the “promotion” type, and that thus far his great concern has been the problem of protecting the buyer of such securities as are passed on by the banks to the ultimate investor—so much so that he has aroused criticism from American business interests impatient for speedy action. But there is a larger phase of the Consortium concerning which I think apprehensions may reasonably be entertained.

Suppose, if merely by way of hypothesis, that the American government is genuinely interested in China and in making the policy of the open door and Chinese territorial and administrative integrity a reality, not merely a name, and suppose that it is interested in doing so from an American self-interest sufficiently enlightened to perceive that the political and economic advancement of the United States is best furthered by a policy which is identical with China’s ability to develop herself freely and independently: what then would be the wise American course? In short, it would be to view our existing European interests and issues (due to the war) and our Far Eastern interests and issues as parts of one and the same problem. If we are actuated by the motive hypothetically imputed to our government and we fail in its realization, the chief reason will be that we regard the European question and the Asiatic problem as two different questions, or because we identify them from the wrong end.

Our present financial interest in Europe is enormous. It involves not merely foreign governmental loans but a multitude of private advances and commitments. These financial entanglements affect not merely our industry and commerce but our politics. They involve much more immediately pressing concerns than to our Asiatic relations, and they involve billions where the latter involve millions. The danger under such conditions that our Asiatic relations will be sacrificed to our European is hardly fanciful.