The general and continuing effect of the notes was seen in the behaviour of the Japanese in China. The Japanese papers boldly declared that Japan would interpret the term "special interests" in a way to suit herself, and that it implied the supremacy of Japanese political influence in China. The thrusting forward of this View did not strengthen the government of General Tuan. Several more provinces followed those which had declared their independence with acts that made their allegiance at least doubtful. General Tuan's appointee as military governor of Hunan suffered defeat at the hands of the southern troops. The governors of the Yangtse Valley, under the leadership of General Li Shun, addressed to the Government pointed inquiries about financial dealings with the Japanese and the purchase of arms, which was reported to involve an arms alliance.
As the attacks were directed at him personally, General Tuan felt that he must resign. Notwithstanding an outward show of amity, General Feng Kuo-chang and the Premier had actually not agreed. The Premier wished to make war on the south and conquer it. The Acting President, on the other hand, was in constant correspondence with southern leaders in an attempt to bring about reconciliation. Tuan sent in his resignation. The Japanese worked for his retention. The President did ask him to reconsider, but his resignation finally took effect on the 20th of November. General Wang Shih-chen, who was close to the President as chief of staff, became acting premier. But Tsao Ju-lin, who headed the Japanese clique, was retained.
Peace and unity did not result. The northern Tuchuns gathered at Tientsin on December 4th, and decided to push the war against the south with 200,000 men. This was to be made a pretext for getting more funds.
I kept in touch with General Tuan, in whose personal character and honesty of purpose in wishing China to take part in the war I placed reliance. Also his friend, Mr. Chu Ying-kuang, who had made a fine record as civilian governor of Chekiang, had kept his eye mainly on this goal. Through them I kept in touch with all of the Chinese who fostered such action. If the Chinese of their own initiative should create services for supplying urgent needs of the Allies, and should train a model division for use on the battlefields of Europe, I felt that the United States and her associates would find a way to transport them to Europe. General Tuan was now free of politics. In the conversations I had with the Premier and his associates, the idea of a special organization for preparedness was talked over. The upshot of this was the creation of a War Participation Office, with General Tuan as its president. The Office was to make constructive plans for developing resources useful in the war, and for training troops for Europe.
Meanwhile, the Japanese were "cutting loose" in Shantung. Quite openly they were trying to set up an administration in what they called the railway zone. The agreements between China and Germany contained no provision for such a zone. The Germans merely had the railway itself, and certain specific mining enterprises, together with the port of Tsingtao. A general priority in the mining districts within a zone of ten miles along each side of the railway had been abandoned some time previous to the war. Now the Japanese asserted in this "zone" general administrative power, including policing, taxation, forestry, and education. With this encroachment, the Chinese noted evidences of Japanese toleration of revolutionary and bandit activities wherever they served the purposes of the invaders.
People came frequently from Shantung to see me in order to lay before me their complaints and petitions. They were distressed, but I could not help them, save where American rights were involved. The Shantung men reported that the Japanese were making the Lansing-Ishii notes the basis of their propaganda, stating that Japan's special position had now been recognized. This penetration into the interior of one of the provinces of China proper by a foreign political administration was undoubtedly the most serious attack ever made on Chinese sovereignty.
A member of the Chinese Foreign Office called on me on the 21st of December, and spoke earnestly about the Japanese inroads in Shantung. He said nothing could stop the Japanese. Their minister had stated that it would be difficult to change an ordinance signed by the Premier and sanctioned by the Emperor.
Among both Chinese officials and the general public all was discouragement and depression. The first effect of the Lansing-Ishii notes, the strong influence exercised by the pro-Japanese clique in the government because of the financial backing they got, the knowledge that such backing had to be bought with valuable national concessions, the increasing disunion between north and south, the general despair of any constructive and unifying policy being possible, made the Chinese individually and collectively paralysed with doubt, fear, and a feeling of impotence. It was plain that Japanese influences, making a politico-commercial campaign in China, were everywhere actively taking advantage of this demoralized state of the public mind and intensifying it through their manipulations.