An American Diplomat in China

by Paul S. Reinsch

All other forms of taxation were disorganized. The collection of the land tax was in many places discontinued; records had been destroyed, or the population took an attitude hostile to its collection. The proceeds of the likin, as far as collected, were retained for provincial use. Altogether, the Central Government received from the provinces not more than 10 per cent. of the estimated income from these sources under the last Imperial Budget for 1912.

Meanwhile, the Central Government had been living from hand to mouth, using the proceeds of foreign loans for administrative purposes, and was kept going by taking cash advances upon foreign loan contracts made for furnishing materials and for various concessions. In this way the future had been discounted to a dangerous extent.

The weakness of the financial administration of the Government was found in all other branches of its activities. There was little evidence of constructive capacity.

In the ministries and departments of the Central Government the greatest disorganization was apparent. In dealing with technical questions the officials were often entirely at sea, not being trained themselves in these matters, nor willing to make real use of the many advisers who were engaged by the Government; there was no adequate system of accounting; the departmental records were not well kept; frequently the existence of a transaction was not known to the officials most nearly concerned; past transactions, fully consummated, had been forgotten; there was no centralization of governmental knowledge; so a great deal of the public business was transacted in a haphazard way, leading to a helpless opportunism of doing the things most strongly urged and of grasping at small immediate advantages at the cost of engagements long to be regretted.

Ambitious schemes of general policy had been brought up, and elaborate regulations promulgated, to all of which little attention was subsequently paid. On the other hand, there had scarcely been one single concrete result obtained in constructive work.

The metropolitan Province of Chihli had been quiet and peaceful since the outbreak of 1912. The Government here certainly had sufficient authority to introduce constructive reforms, and the general conditions for such action in this province had been relatively most favourable. But not even in the case of Chihli Province had the taxation system been rendered efficient; no efficient auditing methods had been introduced in practice, although systems of auditing control had been promulgated; educational institutions had been allowed to run down: in short, under the most favourable conditions, no constructive work had been accomplished.

Nearly all attempts to do something of a constructive nature had been immediately associated with foreign loans, often involving a cash advance to the Government. It might, of course, be said that the great difficulty of the Chinese Government was exactly that it lacked the funds for carrying out constructive work; and that, therefore, only such lines of improvement could be followed for which it had been possible to secure foreign loans.

This, however, was only partly true. A great many reforms could have been accomplished without the increase of expenditure; indeed, they would have resulted in a reduction of outlay. The fact seemed to be that the Central Government, realizing how important foreign financial support had been to it during the Revolution of 1913, was anxious to secure more and more funds from abroad without counting the ultimate cost.

An opportunity for obtaining from abroad large sums of money, far beyond any amount ever before dealt with by Chinese officials and merchants, in itself had an unsettling effect upon methods of public business. The old caution and economy, which kept the public debt within narrow limits, had given way to a readiness to obtain funds from abroad in enormous amounts, without apparently the realization of the burden imposed upon China by way of the necessity of return in the future through the results of labour and sacrifice of millions of people.