But when the Standard Oil Company's contract had been signed, not much was publicly known about it save in general terms. Rival interests began to portray it as involving inroads upon the rights of the Chinese people, especially of the provinces of Shensi and Chihli. Stories of bribery were circulated in the papers. In the negotiations concluded at Peking no particular attention had been paid to local opinion, the suspicions of provincials were stirred, and an outcry speedily arose.
The representatives of the Standard Oil Company had left Peking. I informed the company that its interests were endangered. Its response was to send to Peking Mr. Roy S. Anderson, the American whose intimate knowledge of Chinese affairs has been referred to. Mr. Anderson held sessions with those who had objected, especially with the provincials of Shensi who were resident in Peking. He discussed with them the terms of the contract, pointing out the benefit to the provinces through the development of a large industry there. The Chinese always respond to reasonable discussion, and not many days later the very associations which had protested most vigorously against the agreement waited upon the Minister of Agriculture and Commerce with their congratulations. They promised the aid of the province in carrying out the contract. Had the contract not been straightforward and fair in its terms and free of undue influence in its making, such active support could not have been had.
It was then that the Chinese Government created an Oil Development Bureau, together with a River Conservancy Bureau for drainage works, including those projected in the Hwai River region. Of the new Oil Development Bureau the Prime Minister, Mr. Hsiung Hsi-ling, on his resignation from the cabinet in March, accepted the position as chief. He had been both Premier and concurrently Minister of Finance. Tall, good-looking, with full face and shining black hair, Mr. Hsiung speaks with great fluency in a high-pitched voice. Though he was a member of the Chin Pu Tang, or progressive party, he had been selected Premier by Yuan Shih-kai, who was fighting the democratic party (Kuo Min Tang), probably because he believed that parliament would reject him and he could then blame that body for obstructive tactics. It accepted him, and Yuan took another path to overthrow parliament. In his career Mr. Hsiung had been aided by the counsel and coöperation of his wife, who is exceptionally capable. Well-intentioned, broad-minded, given to Western methods, the Premier was handicapped during his term through relative inexperience in administrative and financial matters. He was pitted against men of shrewdness as politicians and of deep immersion in financial manipulations.
As chief of the Oil Development Bureau, Mr. Hsiung's first task was that of pointing out to the Japanese minister, Mr. Yamaza, whom the Japanese interests immediately pressed forward, that no monopoly of exploitation had been granted to the Standard Oil Company, for within a year the company would have to select specific and limited areas within the two provinces where production was to be carried on.
"The grant to Americans," the Japanese minister thereupon remarked, "seems to indicate that China does not care much about the international friendship of Japan."
Mr. Hsiung's reply was that this was a business arrangement, and the nationals of other countries as well—Great Britain, France, and Germany—had sought such concessions in the recent past. To the inquiry whether a similar agreement would be concluded with Japan for other provinces, the director replied that it would not at this time be convenient.
"Then I hereby notify you," Mr. Yamaza rejoined, "that in all likelihood I shall take up this matter with the Minister for Foreign Affairs."
Mr. Yamaza referred to the Japanese engineers who at one time worked in the oil fields of Shensi Province; whereupon Mr. Hsiung recalled that American and German engineers had formerly been employed in the Hanyehping iron enterprise; yet when that company made a loan agreement with Japanese interests, no objections had been made either by America or Germany.
This conversation illustrates the manner in which attempts are often made to establish prior claims with regard to enterprises in China by alleging a prior desire or the prior employment of individuals—considerations which would nowhere else be considered as establishing a preference or inchoate option. It is as much as to say that by merely expressing a wish for a thing one has already established a prior right to it should it be given out.
The making of two important contracts with the Chinese Government naturally attracted attention. Of the British press the North China Daily News repeated the judgment of its Peking correspondent: "The Americans deserve their success, for they have worked for it steadily and consistently."