The Daily News attributed this success primarily to the fact that since the days of Secretary Hay, American enterprise in China had been consistently pacific and benevolent. "In no country in the world," it declared, "can more be done through friendship and for friendship's sake than in China."
The German press, while inclined to be critical, still admitted the fairness of the contracts and the probable benefit to be derived therefrom by China, and spoke in disapproval of the Japanese attitude assumed toward the new oil enterprise. Later a long article appeared in the chief German paper in China (Ostasiatische Lloyd), in which the existence of a very far-reaching policy of economic penetration by America was surmised. The writer imagined that all the factors—educational, financial, and industrial—were being guided according to a complicated but harmonious plan to achieve the actual predominance of American interests in China.
The German minister, Von Haxthausen, spoke to me about this article. "I hope," he said, "that you will not conclude that its views are those of myself and my legation."
I assured him that I felt highly flattered that anybody should have conceived that American action proceeded with such careful planning and such cunning grasp of all details.
The Franco-Russian semi-official sheet, the Journal de Pekin, continued its carping attitude against all American enterprise. It lumped together the Y.M.C.A., missionaries, Standard Oil, and the British-American Tobacco Company as engaged in a nefarious effort to gain ascendency for American influence in China. It failed, however, to surmise the subtle plan suggested in the German paper, but presupposed an instinctive coöperation of all these American agencies. This paper was occasionally stirred to great waves of indignation, as when it discovered that the Y.M.C.A. was undermining Chinese religious morale and destroying the sanctity of holy places by establishing a bathing pool in one of the temples. This deplorable desecration, which wrung from the breast of the Belgian editor of the Franco-Russian sheet moans of outraged virtue, had for its substance the fact that in the large monastery of Wo Fu Ssu—in the foothills fifteen miles from Peking, where the Y.M.C.A. had summer quarters—a large pool in the residential part of the enclosures was actually used for a dip on hot mornings. But no Chinese had ever hinted that his feelings were lacerated.
The American papers and Americans generally were somewhat encouraged by this constructive action. In the Chinese Press the veteran American lawyer, T.R. Jernigan, said: "It is clear that the Wilson Administration will use its influence to further the extension of the business of American merchants whether they act in a corporate capacity or otherwise."
On the side of finance as well as industry the Chinese courted American interest. The Minister of Finance and Mr. Liang Shih-yi were frequently my guests; and we conversed particularly on the financial situation. Both took a view quite different from the traditional Chinese official attitude. They desired to have the Government make itself useful and take the lead in organizing both national credit and industry. They considered it possible to develop Chinese domestic credit to an extent that would materially supply the financial needs of the Government. Unfortunately, the great system of banking which had been built up by the Shansi Bankers' Guild was very inadequate to modern needs. Banking had rested wholly on personal knowledge of the character and credit of borrowers; no collateral was used, there was no dealing in corporate securities.
When China came into contact with the business methods of Western nations, this system could not help in developing new enterprises. That task fell largely to the foreign banks established in the treaty ports, who had no vision of the possibilities of internal development in China. The Shansi bankers, on their part, unable to adapt themselves to new conditions, saw their field of action gradually limited, their business falling off. These banks lost their grip on affairs. They felt themselves in need of financial assistance from the Government. The Minister of Finance was considering whether these old institutions might not be transformed into modern and adequate agencies of Chinese domestic credit. He and other native financiers became interested in the national banking system through which, in the United States, quantities of public debentures had been absorbed to furnish a sound basis for a currency.
It seemed impossible to utilize the Shansi banks as the main prop of a modern system. A new organization, such as the Bank of China, planned on modern lines, might be strengthened by American financial support and technical assistance. Mr. Liang Shih-yi was willing to give to American interests an important share in the management of the Bank of China in return for a strengthening loan. A New York contractor, Mr. G.M. Gest, was at this time in Peking on a pleasure tour with his family. Impressed with the need for the launching of new financial and industrial enterprises in China, his first thought had been to secure a concession to build a system of tramways in Peking. Chinese officials had previously told me of an existing Chinese contract which might be turned over to Americans. I was not very enthusiastic about this particular enterprise, because I feared it might destroy the unique character of Peking street life, without great business success or much benefit to anybody.
On inquiring further we found that French interests had just signed a loan contract which covered, among other things, the Peking tramways.