The territorial concessions obtained, one after the other, by Germany, Russia, France and Great Britain, and the ear-marking of other Chinese territory by arrangements made either by the Powers concerned, as well as by Japan, with China, or by certain of those European Powers between themselves, caused uneasiness in Washington. There was a fear lest the new activity displayed by various Governments might result in the closure, or restriction, of Chinese markets hitherto open to all countries, in which case serious injury might accrue to American commerce and enterprise. The apprehension was not unfounded, even so far as the Declarations regarding the non-alienation of Chinese territory were concerned. Although the actual wording of these Declarations did not of itself justify an inference of this nature, from the fact that they were made at all it was generally held that their effect was to establish, in each instance, a sort of priority of right—a position of exceptional advantage in favour of the Power to whom the Declaration was made. The inference derived support from the vagueness of the term “spheres of interest” applied to the regions affected by the Declarations in question, and was also strengthened by the common impression formed at the time that this ear-marking of Chinese territory portended an eventual partition of China. This seems to have been the view taken by the United States Government.
In September, 1899, the American Secretary of State addressed Circular Notes to the British, French, German and Russian Governments, expressing the hope that they would “make a formal declaration of an ‘open door’ policy in the territories held by them in China.” An assurance was sought from each Power: that it would “in no way interfere with any treaty port or any vested interest within any so-called sphere of interest, or leased territory, it might have in China”; “that the Chinese Treaty tariff of the time being should apply to all merchandise landed or shipped to all such ports as are within the said ‘sphere of interest’” ... and “that duties so leviable should be collected by the Chinese Government”; and that it “would levy no higher harbour dues on vessels of another nationality frequenting any port in such ‘sphere’ than should be levied on vessels of its own nationality, and no higher railroad charges over lines built, controlled or operated within its ‘sphere’ on merchandise belonging to citizens or subjects of other nationalities transported through such ‘sphere’ than should be levied on similar merchandise belonging to its own nationals transported over like distances.” In the following November similar, though not identical, Notes were addressed to the Governments of France, Italy and Japan, asking them to join in these formal declarations of policy.
The reason for the distinction thus made both in the dates and tenor of the two series of communications may, perhaps, be found in the fact that the territories leased by the three first-named Powers, besides their greater strategic importance, were situated in a part of China where American interests were more closely concerned than in the region further south affected by French action, and that Japan, though interested in the Declaration regarding Fukien, had neither sought nor obtained any cession of territory; while Italy had failed in her endeavour to emulate the example of her nearest continental neighbours.
The assurance received from China by Japan regarding the non-alienation of the province of Fukien was, as we have seen, in effect, an admission of the position of power and influence she had by this time acquired. Her inclusion in the list of States consulted by America on this occasion was indirectly an endorsement of this admission, and is the first public recognition of her new status as a leading Power in the Far East.
Favourable replies were received from all the Powers consulted; each, however, with the exception of Italy, making the reservation that assent to the proposals was subject to the condition that all the Powers interested should participate in the Declarations. Thereupon, in March, 1900, the American Secretary of State sent instructions to the American representative at each of the capitals of the Powers consulted to inform the Government to which he was accredited that, in his opinion, the six Powers in question and the United States were mutually pledged to the policy of maintaining the commercial status quo in China, and of refraining, each within what might be considered its sphere of influence, “from measures calculated to destroy equality of opportunity.”
The Notes thus exchanged between the United States and the six other Powers above mentioned explain the origin, as they also constitute “the formal basis” (to use Mr. Hornbeck’s words) of what has ever since been known as the policy of the “Open door and equal opportunity” in China. The latter part of the phrase was afterwards used in the Anglo-Japanese Treaty of Alliance to designate the policy of Great Britain and Japan in Korea as well as in China. To the former country, now annexed to Japan, it no longer applies; but the policy has theoretically, if not always practically, been in force as regards China, for the last twenty-one years, and there is reason to think that more may yet be heard both of the phrase, and of the policy it represents, in connection with affairs in China, and possibly in other parts of Eastern Asia.
In touching on the subject of financial reform in a previous chapter attention was called to the monetary confusion which existed after the abolition of the feudal system, when the new Government which had come into power found itself saddled with clan debts and with clan paper money, mostly depreciated and of many different kinds. It was pointed out how, as a natural consequence of this monetary confusion and of financial embarrassments due to other causes, the monetary transactions of the country were for many years conducted on the basis of an inconvertible paper currency; and how by successive steps, taken as opportunity offered, to remedy this state of things, specie resumption on a silver basis was at length effected in 1886.
It was not till eleven years later, in 1897, that Japan adopted her present gold standard. The reasons for this step are given in the chapter on Finance contributed to Marquis Ōkuma’s book, already mentioned, by Marquis Matsugata, who also explains the means by which it was accomplished.
“When,” says this authority on Japanese financial matters, “the Government opened places for the redemption of paper money in 1886, silver coins only were offered in exchange. Such being the case, the currency of Japan at that time was based practically on a silver standard, although legally the system was bimetallic. The price of silver, however, owing to various reasons, gradually fell, and artificial checks to its fall were effective only for a short time. Fluctuation after fluctuation in foreign exchange seemed to follow each other in endless succession. In the meantime Western countries commenced to adopt gold monometallism. Our authorities knew very well that, to insure a healthy growth of finance, Japan must adopt, sooner or later, a monometallic gold standard, and this was impressed on the minds of financiers so keenly that the Government determined to effect the reform as soon as possible. The desired opportunity came with the Peace Treaty of 1895, when China began to pay to our country an indemnity of 200,000,000 taels” [sic the amount was really 230,000,000 taels]. “Further negotiations between our Government and the Chinese authorities resulted in the payment of the indemnity, not in Chinese money, but in pounds sterling. This was important, since a large gold reserve was indispensable for the establishment of gold monometallism.”
The experience of 1886, referred to by Marquis Matsugata, proved that confidence in the Government’s ability to meet its obligations in paper money was all that was needed. This confidence once established, no further difficulty presented itself in the passage from an inconvertible to a convertible paper currency. Prepared for heavy calls on the specie resources of the Treasury, the Government had on that occasion accumulated a reserve of £5,000,000. When, at the end of a few days after the date fixed for the resumption of specie payments, the demand for specie ceased, it was found that the total value of notes presented for conversion did not exceed £30,000. The change from a silver to a gold standard in 1897 was conducted with equal facility, a large portion of the Chinese indemnity being transferred abroad. There it served a useful purpose in maintaining Japan’s financial credit, and, as a natural consequence, the market price of the Bonds of her numerous foreign loans, which for several years, to the surprise of private investors, were quoted at higher rates abroad than at home.