The Finance Minister unblushingly tried to suspend the renewal of the currency loan option until the foreign banks should consent to the gold-note scheme. Here I protested, saying that under the Currency Loan Agreement the American Government had a right to be consulted before any such proposals could be considered.
His Excellency Hsu Shih-chang was elected President—a veteran statesman of the old régime. In my first interview with him he complained: "I am trying to deal with the south; but they have nobody to bind them together and represent them. We are demobilizing most of our superfluous troops, but I am worried because the Government lacks financial support."
I talked with him again often. General Li Shun, of Nanking, had been asked to mediate. The southern leaders needed to be "grubstaked" to pay off their troops, then an agreement with them could be reached. The President's solution smacked of buying them off. But this would not end the militarist intriguing. President Hsu issued on October 25th a peace mandate, taking President Wilson's statement about reconstituting international unity as his point of departure. The President had cabled this to Hsu when he was inaugurated. The press was reporting that the British and American ministers were working for internal peace; our mediation would have been popular. It would have pulled the leaders of north and south out of their impasse. President Hsu cabled back to Mr. Wilson: "Though we are separated by a great distance, yet I feel your influence as if we were face to face."
President Hsu had gotten a report from Dr. George E. Morrison, who had returned from investigations in south China. Doctor Morrison made the point that internal strife must be ended if China was to do anything in the Great War and to hold up her rights strongly at the Peace Conference. I will quote this report somewhat at length:
China under the advice of several of her more powerful ministers looks to Japan for guidance, Japan having in an incredibly short space of time, by the energy and patriotism of her united people and the wisdom of her rulers, raised herself to an important position among the nations. But Japan is no longer one of the great world powers. Japan lacks experience of modern war. Her army and navy are much out of date. Her troops have no experience of the marvellous methods of modern war. She has no submarine service, she has no air service. Her government, created after the model of Germany, her kaiserism, her Prussian militarism, are fast becoming obsolete. Compared with the great powers of Great Britain, America, France, and Italy, the strength of Japan is meagre. Japan at the end of the European war is a third-rate power. Her government is the only military autocracy existing in the world to-day, and for that reason Japan will occupy a unique position at any peace conference. Japan is the only one of the Allied nations who has failed to take any adequate part in the great world struggle.
For China, a republic, to seek the guidance of the only existing autocratic military government in the world to-day has at least the appearance of inconsistency. Such action is viewed with suspicion by all those in China who are aspiring to a democratic government—a government by the people for the people.
If intervention is to be prevented, there must be early restoration of democratic government, early reconciliation. As the simplest and quickest way in which this can be effected, I suggest that your Excellency invite the President of the United States to act as mediator, to bring together representatives of the two great parties of state in China that they may hear and weigh each other's view and agree to a compromise. There is no loss of face in doing this.
During my recent visit to the south I gave expression to Chinese views to all the leading men with whom I had the opportunity of discussing the question of peace and reconciliation in China. All without exception expressed their belief and confidence that an invitation to the President of the United States to act as mediator would be a wise act and one that promised the easiest solution of the grave conflict which at present divides into hostile camps this fair land of China.
Japan persisted in her work, the United States remained indifferent.
The people of China got tired of all this. As a matter of fact, China was divided only on the surface. Deep down into the life of the people political controversies had not penetrated. They went on, placid and industrious, regardless of the bickerings of politicians. Chinese revolutions and declarations of independence might be bruited to the world, which might think China had plunged into anarchy. As a people the Chinese are freer from governmental interference than any nation living. If the entire Central Government should suddenly disappear from the face of the earth, it would make little difference in China. Yet the long continuance of political conflicts lets foreign intrigue into the national quarrels, and so reacts dangerously.
The people as a whole wished the nation to be a unit. But the professional militarists had to be paid off. After the President had issued his peace mandate, he asked that I see him. "If decisive action for peace is taken," he asked, "may we depend on the United States to back us in getting funds to pay off these large bodies of troops? If not, will she not lead in a reorganization loan joined by several powers?"
I asked the American Government for the funds desired. If they came conditionally upon the reunion of China, the responsible military governors and civilian leaders north and south would have the means to be rid of the predatory and parasitic bands. Japan then roused herself. She approached the governments of the United States, France, Great Britain, and Italy on October 23rd, asking that they work toward a peace settlement with the leaders both north and south. The American Government approved, adding that China needed money, but that no funds would be afforded her until a reunited government was seated.