AMIDST TROUBLES PEKING REJOICES
The Armistice meant the end of the Great War. Would it also mean the end of sinister intrigue in China?
In the joy of the world victory everybody felt so. But when I returned to Peking early in October, 1918, I found that things had gone from bad to worse. Money had been squandered on war expeditions which had torn the country, not united it. The unofficial Japanese financial agent, Mr. Nishihara, a borer in the rotten trunk of Chinese finance, had been at work all summer. The fact of his loan negotiations was denied to the very last by the Japanese Legation. Suddenly, on October 1st, Japan's Minister of Finance announced that his government had arranged a number of loans to the Chinese. They involved commitments in the sum of 320,000,000 yen, ostensibly to build railways and iron works; of this amount 40,000,000 yen would be immediately advanced.
The earlier loans had all gone to the inept militarists. The advances on these so-called industrial loans were in the same way dissipated in partisanship, division, distraction. The new parliament had been elected. It was to elect a new president. Money was poured into the contest between Feng, the Acting President, and Hsu Shih-chang. General Tuan had his army of small political adherents, who battened on the funds supplied by the chief manipulators. They formed the Anfu Club—from Anhui, the province of the army clique, and Fukien, the province whence the navy drew most of its admirals.
The inner military ring was operating from the War Participation Bureau, which had preëmpted the control of finance, natural resources, and police. The ministries were powerless. The Government was debauched with the easy money from Japan. With a sardonic grin, the Japanese offered to lend China 200,000,000 paper yen, not redeemable, on which the Chinese Government should base a gold-note issue. On this paper of the Bank of Korea China should repay Japan, with interest annually.
Using the militarists, they tried hard to put it through. But the foreign press, and such Chinese papers as dared, succeeded in laughing it down. Redeemable in Korean or Japanese banknotes, which the Chinese never use in daily trade, the proposed government gold notes could not have been forced into circulation. They would only have worse confounded the already existing monetary confusion.
The police terrorized and bullied the papers that opposed Japan's loan negotiations and printed the facts about them. Nearly a dozen were suppressed. The Anfu gang had cowed the Government and people in north China. Without moral and legal authority, it made the Government impotent in its prime functions, such as levying taxes and protecting lives.
The diplomatic corps had to consider whether the customs and salt revenues should be released to such a government. The best interests not only of China, but of all the friendly nations, including Japan herself, were being blighted. The prostitution of the War Participation Bureau by the gold-lust of the militarists, with Japan as pander, fostered the brawls of faction and disunion. Public opinion was throttled and the corrupt elements found no organized popular opposition.
Tsao Ju-lin, Minister of Finance, advocated the spurious gold-note project, which had been dubbed the "gold-brick scheme." Tsao had represented that the diplomatic corps had approved this scheme. Four ministers jointly informed the Chinese Government that Mr. Tsao's methods tended to destroy confidence between the Government and the legations, and one minister said his legation would thenceforward accept no statement coming from the Minister of Finance until the Foreign Office had vouched for its truth.